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2 Mar 2015
US 10-year treasuries still bullish – RBS
FXStreet (Barcelona) - William O’Donnell, Head of US Treasury Strategy at RBS, comments on the bond market, and further shares the key technical levels and outlook for US 2-year, 5-year and 10-year treasury yields.
Key Quotes
“I'm close to getting a long term sell signal on long-end Treasuries, but we're not quite there yet. If I had to guess, we'll probably see that signal this month or next. March sits in the middle of a seasonally bearish period for US rates; a bear window that extends into mid-May. So the seasonal headwinds are there to keep US rates supported, at least over the near term.”
“I pay as much attention to chart/trend developments in 10yr Bunds as I do with 10yr and 30yr US rates. The bull trends in the Bund chart show no signs of reversing and our award-winning EU rates guys expect still-lower rates once the ECB's QE gets going. I mention all of this because the fluid situation over the Fed's liftoff timing and pace is likely to freeze the debt markets in place with choppy/volatile price action around 2% in Treasury 10's likely to persist at least to Friday's employment numbers”
“2s (0.634%)– 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 now back to mixed this morning.”
“5s (1.515%)– 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 bullish.”
“10s (2.005%)–Next resistance comes in at ~1.96%, the Feb 12th lows that we recently rebounded off of. Next support comes in ~2.40% with major support at 2.66% after that. Daily momentum is still bullish.”
Key Quotes
“I'm close to getting a long term sell signal on long-end Treasuries, but we're not quite there yet. If I had to guess, we'll probably see that signal this month or next. March sits in the middle of a seasonally bearish period for US rates; a bear window that extends into mid-May. So the seasonal headwinds are there to keep US rates supported, at least over the near term.”
“I pay as much attention to chart/trend developments in 10yr Bunds as I do with 10yr and 30yr US rates. The bull trends in the Bund chart show no signs of reversing and our award-winning EU rates guys expect still-lower rates once the ECB's QE gets going. I mention all of this because the fluid situation over the Fed's liftoff timing and pace is likely to freeze the debt markets in place with choppy/volatile price action around 2% in Treasury 10's likely to persist at least to Friday's employment numbers”
“2s (0.634%)– 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 now back to mixed this morning.”
“5s (1.515%)– 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 bullish.”
“10s (2.005%)–Next resistance comes in at ~1.96%, the Feb 12th lows that we recently rebounded off of. Next support comes in ~2.40% with major support at 2.66% after that. Daily momentum is still bullish.”