Powell, Yellen to appear before Congress – Market Overview

Powell, Yellen to appear before Congress – Market Overview

Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen are set to make their first joint appearance before Congress in a highly anticipated market event.

The markets are waiting for them to address the recent upward trend in Treasury bond yields.

What is the situation with U.S. Treasury Bond Yields?

Meanwhile, the upward movement in U.S. Treasury yields appears to have taken a break, although yields are still at high levels. For example, the yield of the 10-year bond fell a few basis points at the start of the European session, dropping to 1.64%. The need for financing from the U.S. Treasury has increased considerably, mainly due to higher fiscal spending levels, putting pressure on bonds in the near future.

Tnote10 is at the bottom of its price on a support zone around 131.80. From a technical analysis perspective, a move below this level would pave the way to the following technical level around 128.00, leading to yield levels closer to 2%.

Today, the market will monitor the auction of the 2-year bond.

The market sentiment lost momentum.

The market sentiment appears to have lost optimism, with equity markets suffering slight setbacks. The clashes that occurred at the North American and Chinese governments in Alaska have contributed to this more negative sentiment, together with rising COVID-19 cases in Europe. E.U. vaccines have an excessively low administration rate, and the herd immunity forecasts for this summer do not seem to be reachable.

The euro, after a rebound yesterday, has fallen back to the low levels of recent days. Still unable to define a clear trend, E.U.'s currency feels the pressure facing a grim economic outlook.

Elsewhere, oil fell again today and is located right in the support zone around 59.00. Below this level, it could make its way to 53.50, where its current uptrend would end.

If the mobility restriction measures imposed by European governments are confirmed and even extended, oil would be one of the most affected assets, at least in the short term.

Sources: Bloomberg, Investing.com.

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