Treasuries breaking down, 10-yr. at 4%

Waiting for Treasuries to break down in price (and break out in yield) has been a bit like waiting for Godot. But we're getting ever closer to the inevitable today, with 10-year yields rising to just over 4%. The key catalyst? A report showing April orders for durable goods (excluding volatile transportation orders) surged 2.5%, the biggest rise since last July and much stronger than expectations for a 0.5% decline.

Meanwhile, if you're looking for evidence of inflation "pass through" from higher commodities prices, look no further than this Bloomberg story on Dow Chemical:

"Dow Chemical Co., the largest U.S. chemical maker, will raise prices on all of its products as much as 20 percent because of surging costs for energy, raw materials and transportation.

"The increases are needed after a 42 percent jump in first- quarter spending on raw materials and energy, Chief Executive Officer Andrew Liveris said today in a statement. The increases take effect on June 1, Midland, Michigan-based Dow said.

"Dow is trying to pass on higher costs to customers amid company forecasts that spending on energy and hydrocarbon-based ingredients will climb to $32 billion this year, four times the $8 billion the company spent in 2002. The rising costs are leading to ``difficult discussions'' with customers about increased prices for Dow products, Liveris said."

UPDATE: I've added a chart of the iShares Lehman 20+ Year Treasury Bond Fund. This ETF holds long-term Treasuries and is a good proxy for bond prices. You can see how the 200-day moving average has given way, and how bond prices are breaking down from a multi-week trading range.