Quotes from BofA Merrill Lynch:
- We turned bearish on Treasuries last week, looking for 10yr yields to break the 100d at 2.148% ahead of a push to 2.347%/2.434% and potentially beyond. Pullbacks should be limited to 1.953%, worst case 1.840%.
- With Treasury volume climbing and the move Index at risk of breaking its Oct highs at 101.28, this could be a near term headwind for US equities, particularly as the VXV/VIX ratio closed above 1.2 twice last week.
- To be clear, we remain bullish the S&P500, but as ESH5 approaches our 2136 upside target, the potential for a pause/consolidation back towards 2062/2031 is too great to ignore before the larger uptrend resumes.
