Chart of the day: Treasury test

The big investment surprise so far this year is that the yield on benchmark US 10-year treasury notes fell rather than rose in response to the tapering of the Federal Reserve’s quantitative easing programme. Why? Well, January’s high was the psychological 3 per cent level. Also, traders seemed to have temporarily forgotten that a yield curve can be normal, flat or inverted. The big picture is that the 10-year yield has been dropping away from a trend line since June 2006. It is now heading for a test of an important Fibonacci support at 2.48 per cent. A weekly close below that level suggests a target of 2.325 per cent next.