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2025-07-30 21:08:23
Hidden Secrets in the Bond Market: Does 7-Year Low Volatility Signal a Big Rally? (1) On July 30th, Beijing time, despite both the US ADP employment data and second-quarter GDP data exceeding expectations, the US Treasury market presented a complex picture. (2) European stock markets rose slightly, the US dollar and crude oil strengthened, while gold retreated. (3) The US 10-year Treasury yield currently stands at approximately 4.36%. (4) Earlier on Tuesday, strong demand for the 7-year Treasury auction and weaker-than-expected employment data sent US Treasury yields generally lower, with the 10-year yield falling to 4.328%. (5) The market generally expects the Federal Reserve to maintain interest rates, but some believe there may be easing signals in September. (6) Volatility in the US Treasury market is currently unusually compressed, with the weekly Bollinger Band width reaching a near seven-year low since September 2018 and the monthly Bollinger Band width reaching a near 18-year low since October 2007. 7. Historical experience shows that this extremely compressed volatility often signals the impending emergence of a strong market trend. 8. Traders should be wary of a breakout of the 10-year Treasury yield within the 4.187% to 4.495% range, as the momentum following a breakout could be exceptionally strong.
