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2 Mar 2015
US 10-year treasury yields near-term constructive for 1.78% - RBS
FXStreet (Barcelona) - Dmytro Bondar, Technical Analyst at RBS, views that US-10year treasury yields is seeing a correction but remains constructive for 1.78% in the near-term.
Key Quotes
“We suspect that there is a greater risk of a Bank of Canada rate cut than an RBA rate cut in the week ahead. That said, the failure to cut rates might not spur a strong rally as the lack of action now will simply raise the conviction for a later move."
“The market is seeing a correction, but remains near- term constructive for 1.78%, which we would see as long- term selling area. This is due to the 1.61% - 1.78% region being a sell region of an inverted Head and Shoulders pattern formed on the yield chart during 2011-2013.”
“Therefore, I maintain the view of being marginally constructive for the forthcoming week, but look to sell against 1.78%.”
“In other words, I think this minor correction is not the key turning point we were waiting for to sell, as I believe the market is due for a bullish swing before forming the ultimate yield base near 1.78%.”
Key Quotes
“We suspect that there is a greater risk of a Bank of Canada rate cut than an RBA rate cut in the week ahead. That said, the failure to cut rates might not spur a strong rally as the lack of action now will simply raise the conviction for a later move."
“The market is seeing a correction, but remains near- term constructive for 1.78%, which we would see as long- term selling area. This is due to the 1.61% - 1.78% region being a sell region of an inverted Head and Shoulders pattern formed on the yield chart during 2011-2013.”
“Therefore, I maintain the view of being marginally constructive for the forthcoming week, but look to sell against 1.78%.”
“In other words, I think this minor correction is not the key turning point we were waiting for to sell, as I believe the market is due for a bullish swing before forming the ultimate yield base near 1.78%.”