Treasury yields hold slight bounce after yesterday’s retreat

10-year Treasury yields up 1.8 bps to 1.632%

USGG10YR

After the drop yesterday, Treasury yields are holding a touch higher on the day just above 1.63% now in European morning trade. The low around 1.61% continues to reaffirm some semblance of a soft bottom closer to the 1.60% level for now.
If anything, it reaffirms that we are still stuck in this latest consolidation cycle for yields and it is going to take much more to produce the next leg higher.
Quite frankly, while all of the data above are great, it is all coming a bit too early.
The Fed isn’t going to be moving on just a couple of data points from the tail-end of Q1. There needs to be sustained follow through all the way to Q2 and Q3 at least to justify all the hype we have seen over the past few months in the rates market.
As things stand, if the soft bottom at 1.60% can hold up, that may provide some comfort for the dollar despite the souring technical picture. But as long as yields aren’t running away to the topside, any material dollar strength may be hard to come by as well.