7 Apr 2015
US treasuries look ripe for a bearish turn – RBS
FXStreet (Barcelona) - William O'Donnell, Head of US Treasury Strategy, notes that US 2s, 5s and 10s treasury yields are looking ripe for a bearish turn, with the daily momentum being still overbought.
Key Quotes
“As for Treasury benchmark rates, I see nothing that suggests that we're on the cusp of a new, sustainable rate trend. Treasuries do look somewhat overbought from a near-term perspective so I certainly wouldn't chase prices higher from here if a buyer. That's about all I can say with confidence vis-a-vis near-term market direction.”
“My highest conviction view relates to curve slope and the general sense that the further out the curve you go, the more deeply overbought benchmarks appear.”
“Indeed, all technical signs point to the beginnings of a new, sustainable steepening trend in the back end (5's on out) of the curve so that's where my/our focus will be for the time being.”
“2s (0.508%)- Next major support doesn't emerge until ~0.80% where we found buyers back in the spring of 2011. Resistance seen at 0.40% where we'd close a gap left behind in late October. Daily momentum is still overbought and looking ripe for a bearish turn.”
“5s (1.32%)- Next major support comes in at 1.80% and just above. Next resistance begins at ~1.30% and extends down to major resistance at 1.15%. Daily momentum is still overbought and looking ripe for a bearish turn.”
“10s (1.90%)-Next resistance comes in some congestion in and around 1.80% then the low yields of 1.64%. Next support comes in ~2.40% with major support at 2.66% after that. Daily momentum is overbought and attempting a bearish turn this morning.”
Key Quotes
“As for Treasury benchmark rates, I see nothing that suggests that we're on the cusp of a new, sustainable rate trend. Treasuries do look somewhat overbought from a near-term perspective so I certainly wouldn't chase prices higher from here if a buyer. That's about all I can say with confidence vis-a-vis near-term market direction.”
“My highest conviction view relates to curve slope and the general sense that the further out the curve you go, the more deeply overbought benchmarks appear.”
“Indeed, all technical signs point to the beginnings of a new, sustainable steepening trend in the back end (5's on out) of the curve so that's where my/our focus will be for the time being.”
“2s (0.508%)- Next major support doesn't emerge until ~0.80% where we found buyers back in the spring of 2011. Resistance seen at 0.40% where we'd close a gap left behind in late October. Daily momentum is still overbought and looking ripe for a bearish turn.”
“5s (1.32%)- Next major support comes in at 1.80% and just above. Next resistance begins at ~1.30% and extends down to major resistance at 1.15%. Daily momentum is still overbought and looking ripe for a bearish turn.”
“10s (1.90%)-Next resistance comes in some congestion in and around 1.80% then the low yields of 1.64%. Next support comes in ~2.40% with major support at 2.66% after that. Daily momentum is overbought and attempting a bearish turn this morning.”