18 Dec 2014
No signs for a beginning of any bearish moves for treasuries – RBS
FXStreet (Barcelona) - William O’Donnell of RBS, notes that the recent sell-off in treasuries doesn't point towards the beginning of a bearish phase, and further anticipates potentially weaker numbers ahead to keep the sell-off muted.
Key Quotes
“I see NO signs that the ~30hr sell-off in Treasuries is the beginning of a new bear move. Indeed, we have some potentially weak numbers up ahead that should mute any sell-off.”
“Looking at positioning, sentiment and momentum right now, it's still my guess that the start of the bear move is Q1 2015's business, perhaps aligning well with the notably bearish US rates seasonals that begin in late January and extend into mid-May.”
“But for now, I still lug around the notion that it's too late to buy Treasuries and too early to sell them for a bigger bear move. This sounds wishy-washy but how can anyone have any trend confidence when the Fed still searches for theirs?”
“5s (1.64%)– Next support comes in at 1.70% (where we were Monday last week) and then it gets stronger at 1.80% and just above. First resistance emerges at 1.47% and then major resistance lines up at ~1.27%. Daily momentum is bearish again.”
“10s (2.18%)–Next resistance comes in at the flash crash lows ~1.86%. Next support comes in ~2.40% with major support at 2.66% after that. Daily momentum is bearish.”
“30s (2.77%)– Bonds don't have any solid support until 3.105%, the November "lows." Next resistance is at ~2.50%, the all-time rate lows for bonds. Daily momentum is now bearish.”
Key Quotes
“I see NO signs that the ~30hr sell-off in Treasuries is the beginning of a new bear move. Indeed, we have some potentially weak numbers up ahead that should mute any sell-off.”
“Looking at positioning, sentiment and momentum right now, it's still my guess that the start of the bear move is Q1 2015's business, perhaps aligning well with the notably bearish US rates seasonals that begin in late January and extend into mid-May.”
“But for now, I still lug around the notion that it's too late to buy Treasuries and too early to sell them for a bigger bear move. This sounds wishy-washy but how can anyone have any trend confidence when the Fed still searches for theirs?”
“5s (1.64%)– Next support comes in at 1.70% (where we were Monday last week) and then it gets stronger at 1.80% and just above. First resistance emerges at 1.47% and then major resistance lines up at ~1.27%. Daily momentum is bearish again.”
“10s (2.18%)–Next resistance comes in at the flash crash lows ~1.86%. Next support comes in ~2.40% with major support at 2.66% after that. Daily momentum is bearish.”
“30s (2.77%)– Bonds don't have any solid support until 3.105%, the November "lows." Next resistance is at ~2.50%, the all-time rate lows for bonds. Daily momentum is now bearish.”