After testing and bouncing off the important 2.32% level four times so far in 2017, the US 10-year bond finally broke below that important threshold. The phenomenon has gone basically unnoticed by the financial commentators, but it occurs just as US economic data begins to wane following the bounce that started in the second half of 2016. Indeed, in the last month both the US non-manufacturing and manufacturing ISM has turned lower, along with PMIs, auto sales, etc. The US 10-year yield has closely tracked changes in the level of the ISM surveys, so it’s not surprising that yields are breaking important barriers just as the economic data turns south.
