Falling Treasury Yields

Perhaps a key tell that the commodity-driven inflation trade was on borrowed time was Treasury yields. After threatening to break higher a couple months back, ten year yields flipped over and have been heading lower.

Yields have now fallen to the 3.1ish level--an area that has frequently found support since 2009. If yields can't get traction around here, then there is not much support till down around 2.5%.

Since lower bond yields often correspond to increased risk aversion among market participants, one has to be conscious about what bond yield trends might be forecasting about the direction of stock and other risky assets prices.

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