Once again the US Fed warned us to prepare for higher yields; but let's face it, all they control is the overnight Fed funds target rate - and the rest is up to the market. The issue is again in play this week, the US yield curve flattening as the government bonds ignore Fed officials. This chart of the 10-year T-note yield shows an A, B, C-type correction, where C equals the height of A, correcting half the drop from 3 per cent in the first quarter of last year (the end of the "taper tantrum"). This month has worked into a small head and shoulders top, a daily close below 2.13 per cent completing it and targeting the psychological 2 per cent, then 1.88 per cent.
