12 Feb 2015
US treasury market bear steepening – RBS
FXStreet (Barcelona) - John Briggs, Head of Cross Asset Strategy at RBS, comments on the US treasury market, and further shares the technical outlook for 2s, 5s and 10s treasuries.
Key Quotes
“The Treasury market is bear steepening this morning, underperforming bunds as risk sentiment improves with a peace agreement over the Ukraine inked overnight.”
“Also assisting better sentiment is the announcement from the Swedish Riksbank of negative rates (cut from zero to -0.1%) and their initiation of QE (SEK10bn of 1-5yr government bonds).”
“Our overnight US rates flows were busy: central bank buying in the front end, real money and fast money 2 way in 10s with better buying early off the negative Greece headlines which shifting to better selling once the Ukraine headlines came out, and real money selling in 30s”
“Overnight Treasury volume (4pm to 6am) was 118% of the 10-day average”
“2s (0.670%)– 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 mixed.”
“5s (1.55%)– Next major support comes in at 1.80% and just above. Nearby resistance lines up at ~1.155%. Daily momentum is bearish.”
“10s (2.03%)–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 bearish.”
Key Quotes
“The Treasury market is bear steepening this morning, underperforming bunds as risk sentiment improves with a peace agreement over the Ukraine inked overnight.”
“Also assisting better sentiment is the announcement from the Swedish Riksbank of negative rates (cut from zero to -0.1%) and their initiation of QE (SEK10bn of 1-5yr government bonds).”
“Our overnight US rates flows were busy: central bank buying in the front end, real money and fast money 2 way in 10s with better buying early off the negative Greece headlines which shifting to better selling once the Ukraine headlines came out, and real money selling in 30s”
“Overnight Treasury volume (4pm to 6am) was 118% of the 10-day average”
“2s (0.670%)– 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 mixed.”
“5s (1.55%)– Next major support comes in at 1.80% and just above. Nearby resistance lines up at ~1.155%. Daily momentum is bearish.”
“10s (2.03%)–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 bearish.”