Are bond yields closing in on a danger zone that spells doom for the entire market?

To Bill Gross, the bear is about to roar in the $13.9 trillion Treasuries market. Benchmark US 10-year yields reached 2.58 per cent overnight, the highest since December, on a report showing unexpectedly strong hiring in February.

They're at 2.56 per cent today but still fast approaching the 2.6 per cent mark that Gross, the bond-market veteran at Janus Capital Management, said will signal the start of a bear market, should it hold on a weekly basis.

From technical analysis to the potential for a pickup in mortgage-related hedging, there's plenty of backing for that as a crucial level. What's more, traders in short-term interest rates are geared up for a hawkish message from next week's Federal Reserve meeting. If they're right, yields could be set to surge.

Ten-year yields have practically doubled since touching a record low 1.32 per cent in July. The losses accelerated after Donald Trump won the presidency in November with promises of tax cuts, deregulation and fiscal spending. Fed signals that a rate hike is likely next week spurred the latest leap in yields.

"If the 10-year breaks 2.6 per cent on a weekly or on a monthly basis, because it's so strong and so important in terms of technical analysis, that if and when it's broken on the upside, it's a bear market," Gross, who manages the $US1.9 billion Janus Global Unconstrained Bond Fund, said in January.

Gross has said the threshold is a more important financial-market barometer than the Dow Jones Industrial Average passing 20,000, which it did January 25.

Other bond titans, like DoubleLine Capital chief executive Jeffrey Gundlach and Guggenheim Partners chief investment officer Scott Minerd, have said a US 10-year yield of 3 per cent is when the bear market begins.

Gundlach said Tuesday in a webcast that it may fall to 2.25 per cent before climbing.Those who follow technical analysis in Treasuries acknowledge that 2.6 per cent is an important level to watch, as 2.64 per cent is a key retracement level for the bull market of the past few years.

If it breaks, yields could complete a full retracement of the entire cycle, implying a test of an area just above 3 per cent, the high of 2013.

Tom di Galoma, managing director of government trading and strategy at Seaport Global Holdings, said he's not so certain that breaching 2.6 per cent spells doom for the market. He said Wednesday that he's betting the 10-year yield doesn't break past 2.62 per cent for now.

Ian Lyngen and Aaron Kohli at BMO Capital Markets see a "big support" at 2.639 per cent - the intraday high on December 15 - that will halt losses.Wednesday's 10-year note auction showed there's plenty of interest in the debt at these levels. The bid to cover was the strongest since June.

Meanwhile, Aussie 10-year bonds continue to sell off, sending yields as high as 2.939 per cent this morning, their highest since late December, and further reducing the spreads between US and Australian yields. The 10-year yield is currently at 2.922 per cent.