A couple of things to note here as the chart clearly shows the attempt of a break on the log-chart.
We now know Sellers are attempting the strategical and important pin on their opponent. It is clear the inflation trade is deteriorating, and in the most profound sense looks rather like a deeper mission that is underway. On the technical side, the next levels in play with a break on the chart here are at 1.00% and 0.50%.
The next charts is clearer as to what we were tracking, firstly the US10Y has completed the full retrace back towards 1.5%/1.75%, and secondly, a lot of unwinding has begun in Commodities and Cyclicals as Oil retreats from the key 75 resistance.
With a break in the log-chart, these larger areas of the chart are now rendered useful for freer manoeuvring and can trigger a sharp uptick in volatility for those who are becoming quite rigid. We need to keep an eye on the state of affairs in inflation and wages in particular, although when looking at the headings cooking for the US via fiscal tightening and etc, it looks like the inflation trade as a lot further to unwind yet.
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