US Treasury yields have declined over the last week, benefiting rate-sensitive segments of the fixed income marekt.

US Treasury yields have continued lower this week. The US Treasury 10YR Yield Index TNX reached 1.15% on Wednesday, where it has now formed, but not broken a double bottom. A move to 1.125% would mark a fourth consecutive sell signal for the index.

The US Treasury Five-year Yield Index FVX gave a second consecutive sell signal when it reached 0.625% on Wednesday, its lowest level since February.

The decline in yields has been a tailwind for many parts of the fixed income market. The iShares US Core Bond ETF AGG has completed three consecutive buy signals and currently sits one box away from giving a fourth, which would come with a move to $117. AGG’s fund score remains in unfavorable territory at 2.11, although it has improved significantly from the lows it reached in April.

Convertible bonds, high yield bonds, and inflation protection remain areas of strength in the fixed income market as all three groups sport average scores north of 3.0 within the Asset Class Group Scores. The general bond-long group has joined the upper tier of fixed income groups as it crossed above the 3.0 score threshold within the last week. It currently shows the second-best score direction among fixed income groups at +1.33, trailing only the US Government-long group which has a positive 2.05 score direction. The movement in yields has been a net positive for the fixed income market at large; at this time there are only six fixed income groups with average scores below 2.5, which places them in the unfavorable/red zone. The Inverse-Fixed Income group is now the lowest-ranking fixed income group with an average score of 1.36, reflecting the generally positive movement in the market recently.