Interest Rates Moving Higher

Interest Rates are moving higher this morning, most likely in response to three items:

1) Chicago Purchasing Managers Index (PMI) surprising to the upside link

Index (SA): Jan '11: 68.8 Feb '11: 71.2 Mar '11: 70.6 Apr '11: 67.6 May '11: 56.6 Jun '11: 61.1

2) KC Fed Manufacturing Survey posted a rebound link

3) End of QE2

All in all, a terrible 4 days for interest rates as the Treasury's 10 Yr Bond index has jumped from a low of 2.84% last Friday to today's current yield of 3.15%, a 31 bps jump in yield.

Technically, the Rsi is still rising at 59.13. Based on the internal Rsi construction, we should expect interest rates to continue to rise, albeit I would expect more modestly moving forward, through the first half of July before we would look to re-assess the interest rate outlook on a technical basis.