“If the data continues to be on the strong side, then the sell-off will persist,” said Patrick Jacq, a senior fixed-income strategist at BNP Paribas SA in Paris. “The first step was some comments from Fed members suggesting that they may exit sooner than expected or at least ease quantitative easing. And then there was key economic data that was above expectations.”

Treasury 10-year yields increased three basis points, or 0.03 percentage point, to 2.20 percent at 11:03 a.m. London time, according to Bloomberg Bond Trader data. The rate earlier reached 2.23 percent, the highest since April 5, 2012. The price of the 1.75 percent note due in May 2023 slid 9/32, or $2.81 per $1,000 face amount, to 96.

Eoin Treacy's view There are a small number of charts that really are worthy keeping a close eye on because they act as barometers for sentiment and as bellwethers for the trends they represents.

The Total ETF Holdings of Gold is indicative of the actions of the investment crowd which has become a powerful force with the capacity to both support and lean on gold prices.

The Dow/Gold ratio has such a lengthy back history and long-term cyclicality that it is important to monitor at the major turns which occur less than every decade.

An inverted yield curve spread for US Treasuries (10yr – 2yr) has been a reliable lead indicator for US recessions for at least 30 years and is therefore worth monitoring for when it next moves below zero.

One of the most interesting at the current time is the Merrill Lynch 10yr US Treasury Futures Total Return Index. It offers perhaps the most compelling argument for having had a long position in US Treasuries over the last three decades because it has trended so consistently. However a loss of momentum is evident over the last 18 months.

The Index failed to sustain the breakout to new all time highs earlier this month and has now returned to test the lower side of the range and the region of the 200-day MA. It has flirted with the region of the 200-day MA on a number of occasions in the last 30 years but never sustained a move below it. Therefore in order to confirm a trend change, it will not only need to drop below the 200-day but encounter resistance at the trend mean on a subsequent rally and drop to new reaction lows.

Against this background the performance of 10-year Treasuries yields is worthy of mention. The yield hit a medium-term low in July 2012 and has held a progression of higher reaction lows since. It posted a new 12-month high yesterday. Having surged to reach this level there is scope for some consolidation but a sustained move below 1.85% would now be required to question potential for continued higher to lateral ranging.

Considering the fact that the Fed has been adding $85 billion per month to its quantitative easing program, the bond market is suggesting that investors are beginning to position themselves not for an additional surge in supply but for the eventually reduction in extraordinary monetary accommodation.

In a benign environment where the economy returns to a sufficiently healthy footing that allows interest rates to rise, Treasuries represent very poor value at these levels. In the event that the Fed miss times the removal of excess liquidity, bond yields could surge. Assuming the possibility that equities are somewhat overvalued and susceptible to a pullback, yields could consolidate. In any of these scenarios, the outlook for shares that have a solid record of increasing their dividends at a rate above that of inflation looks favourable over the medium term.