The Treasury Market, is looking, on a technical basis, bearish. Now whether the technicals actually signal anything is a function of two major factors. First, will foreign buyers of US debt, purchase, thus lower yields? And/or, will the Treasury support the market if there is an absence of foreign inflows?
From 1975 Foreign debt grew 9.2% compounded.
From 2007 – 2008 Foreign debt contracted 12.3% compounded.
This would suggest that foreign buyers are either holding [inflationary expectations] off, or unable themselves to sustain purchases to previous levels. If that is the case, then unless the Treasury via Federal Reserve will continue to support the market via QE, yields will likely rise.
