UST10Y: Next Stop 2.13 ?

Overnight, the US reflation trade continues to fade with the UST10Y tagging the low 2.20 level. Ever since March’s rate hike in combination with Trump’s failed healthcare bill, the US reflation has faded. Our thoughts include a monthly and weekly pivot reversion. We’ve been rock solid on this trade for many of months with a 2.63 R1 rejection. Traders are also looking at the 2.12-2.19 gap back fill. Once the pivot reversion is complete, our research desk in Baltimore will set their eyes on the next projection. As of now, the market bids bonds with geopolitical turmoil flaring up in North Korea and Syria.