You are currently viewing Market Snapshot 5/29/24- Your Hometown Lender

Market Snapshot 5/29/24- Your Hometown Lender

Good Wednesday morning, from your Hometown Lender,

Yesterday, US Treasury prices fell (yields higher) after weak debt auctions (2 and 5-yr notes) and remarks from a Federal Reserve speaker fueled expectations interest rates will remain higher for longer. European bonds followed suit despite German inflation data coming in lower than expected.

Today, not much data.

We had a 7-yr Treasury auction which was again, weak. US equity are lower as well. Not helping is that oil is extending gains as another attack in the Red Sea added to heightened geopolitical tensions in the Middle East. Tomorrow brings GDP and Friday the PCE report.

The two positive things I can point to are:

  • We are getting closer to the high yield in this trading channel and I don’t think it is likely we will break into a higher yield channel with the fed confirming there will not be more rate hikes. With that, there is no reason to drive the yields higher.
  • The below RSI (relative strength indicator) chart below shows that bonds are the most oversold they have been all year. The buyers should come back in soon. If the readings tomorrow and Friday are friendly, we could see this turn back in our favor quickly.

Stay safe make today great!