Yield curve movements-2010

I was doing some research to record the movements in the yield curve in 2010. Therefore i have put together a yield curve graph as of january, june and november month ends. 2010 has witnessed many events. Mainly pertaining to US recovery, Euro core vs peripherals and china and other emerging markets displaying signs of vigorous growth. Of all most important is rise of Gold prices to historical highs. Each of these events played into the changes in the shape of yield curve. Weaker US recovery has been bullish to treasury yields, similarly intensification of Euro crisis led to a safe haven bid.  These two factors played into the fall of yield curve. But as we came close to year end, there is a shift in sentiment of the market players. Yields started rising swiftly. does it mean people are buying into stronger recovery. What has triggered this change. US fiscal deficit widens but the extension of tax cuts is getting greater attention as economists are thinking GDP growth will be boosted by a percentage point.

My prediction for yield curve movements is hinged on same above factors. Weaker US recovery means lower rates. I attach less probability to this so rates have to go higher. Euro will not break up in 2011. We all should remember one thing. Euro project came to genesis from the ashes of second world war.  Europe has been under constant conflagaration through out this millenium. Last 50 years were peaceful years for this continent. Its not that easy to give up this peace. Germany will become stronger by helping the peripheral countries. So any Euro related safe haven bid should be treated as an opportunity to position for higher rates. Another factor that can play into this is how Emerging markets manage their economies. if any crisis erupts here, this will throw a spanner into rates from rising. I forgot two of the main players, Fed QEII and housing recovery. I beleive housing recovery is going to be anemic and slow and will have influence to impede rates fall to rise of rates. Fed QEII will be there as a trump card that can tip all the possibilities in its favor.
Net i beleive we will see higher rates next year compared to 2010.