29 Jan 2015
Technical outlook for US Treasuries – RBS
FXStreet (Barcelona) - William O'Donnell of RBS, comments on the bond market and shares the technical outlook for US treasuries.
Key Quotes
“Treasuries are being led modestly lower by intermediates after US stocks found a bid in the afterhours.”
“UK 10yr Gilt yields fell to a record low of 1.406% moments ago after Mark Carney warned that inflation could turn negative before picking up again in 12mo time.”
“Our overnight US rates flows saw decent sized selling from Asian and EU real$ in intermediates that helped to push 5's from 26+ in the Tokyo session down to 21+ after the crossover.”
“In London hours we also saw EU real$ selling of 10's and 30's and we also had Asian real$ paying in 10's, fast$ receiving in 5y5y and fast$ paying in 2s5s10s.”
“Overnight inter-dealer Treasury volume (4pm to 6am) was 75% of the 10-day average volume for the overnight session.”
“2s (0.512%)– Next major support doesn't emerge until ~0.80% where we found buyers back in the spring of 2011. Resistance next up at ~0.40% where we'd close a gap left behind in late October. Daily momentum is mildly bearish.”
“10s (1.74%)– Next major resistance comes in at ~1.60%, the May 2013 'lows'. Next support comes in ~2.40% with major support at 2.66% after that. Daily momentum is mixed again.”
“30s (2.31%)– Bonds don't have any solid support until 3.105%, the November "lows." For bonds I'd say the next resistance to watch out for is in USH5 at 153-11, the all-time highs for front moth US futures traced out in July 2012. Daily momentum is back to mixed and still overbought.”
Key Quotes
“Treasuries are being led modestly lower by intermediates after US stocks found a bid in the afterhours.”
“UK 10yr Gilt yields fell to a record low of 1.406% moments ago after Mark Carney warned that inflation could turn negative before picking up again in 12mo time.”
“Our overnight US rates flows saw decent sized selling from Asian and EU real$ in intermediates that helped to push 5's from 26+ in the Tokyo session down to 21+ after the crossover.”
“In London hours we also saw EU real$ selling of 10's and 30's and we also had Asian real$ paying in 10's, fast$ receiving in 5y5y and fast$ paying in 2s5s10s.”
“Overnight inter-dealer Treasury volume (4pm to 6am) was 75% of the 10-day average volume for the overnight session.”
“2s (0.512%)– Next major support doesn't emerge until ~0.80% where we found buyers back in the spring of 2011. Resistance next up at ~0.40% where we'd close a gap left behind in late October. Daily momentum is mildly bearish.”
“10s (1.74%)– Next major resistance comes in at ~1.60%, the May 2013 'lows'. Next support comes in ~2.40% with major support at 2.66% after that. Daily momentum is mixed again.”
“30s (2.31%)– Bonds don't have any solid support until 3.105%, the November "lows." For bonds I'd say the next resistance to watch out for is in USH5 at 153-11, the all-time highs for front moth US futures traced out in July 2012. Daily momentum is back to mixed and still overbought.”