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Surprisingly Strong GDP Data, Underwhelming Reaction from Bond Market


 

In reaction to the fastest Q3 growth since 2003, 10-year Yield has climbed from 2.15% to 2.19%!

Hmm... I guess that bond traders either don't believe the data (think it will be revised lower), or they are looking at the unchanged GDP price indicator at 1.4%, which is still well beneath the Fed's target of 2.0%.

Let's notice that YIELD needs to claw its way above 2.23% to trigger meaningful upside potential, based on my chart work.

Meanwhile, stronger U.S. growth accompanied by quiescent movement in Yield, and a Fed looking for, perhaps wanting an uptick in inflation have not inspired a strong bid in Gold, which got clobbered beneath key support at $1186 yesterday, and appears destined to test its Nov-Dec support line, now in the vicinity of $1162.

If $1162 is violated and sustained, it should trigger downside continuation towards $1130.

Only a climb above $1200-$1203 will neutralize recent downside price damage.

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