Long-End Rates Break Higher – Will Today’s PPI Report Fuel Further Upside?
2024.11.14 02:05
came in as expected yesterday, but that didn’t stop long-end rates from rising, with the up six bps and the up two bps. The also continued to melt up after the data, showing that remains sticky after a 0.3% m/m increase.
The bigger question for core CPI is whether some trend change is taking place. It’s unclear at this point, but the annualized rate of change for core CPI rose by 3.6%.
Whatever the case, the 30-year closed at its highest level since early July. This looks like an important potential breakout that, depending on today’s report, could push the 30-year even higher.
Meanwhile, the made its highest close since November 2023 and is approaching the 107.25 level, which is of incredible importance. A breakout means the highs of 2022 could be in play.
This is wreaking havoc across hard assets as real yields rise and commodities like and drop. Gold broke another support level yesterday and an uptrend and could open a path to $2,500.
is at support, too, and a break of $4.05 opens a path to around $3.90.
The (HGX) saw a gain of nearly 1.4% evaporate over the day as rates rose. Rising rates will not be friendly to mortgages or the housing sectors.
In the meantime, stocks have yet to get the memo that rates are rising and may head significantly higher from here. The was basically flat on the day and has stalled at resistance for now.
The only question that remains is when credit spreads snap and start to widen. When they do, that will be the point at which stocks begin to finally cave.
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