Bullish US Long Yields
Yields on the US Treasury note show a major bullish formation, based on technicals and fundamental drivers, suggesting 4.0% could emerge before year-end. The 10-year treasury contract is the world's most liquid financial instrument; reflecting traders pricing of future inflation as well as the US govt's borrowing ability. In our July 6th piece, we predicted a bottom in 10 year yields to occur at 3.15-20% in Q4 from they stood at 3.50% at the time http://bit.ly/1msKVv . Yields eventually bottomed at 3.10% in early October before rebounding towards 3.60%. Rather than basing our fundamental argument for further yield rise solely on inflation fears, the deterioration of US govt borrowing should continue to boost long yields. The eventual signalling of an exit strategy by the Fed should further drive the reverse Head-&-Shoulder formation back into interim resistance of 3.75% (neckline), followed by 4.20%.
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تفسير مراحل الذهب
Mar 17, 2023 21:28 | by Ashraf Laidi.
Ashraf
We saw some crazy movements yesterday (wednesday) during the day and after the FOMC. Do techs still suggest Eur/usd to head south and break below 1.46 this week? Or at least some correction?
Kind regards,
Raczka
Ashraf
One thing for sure is the long term bullishness for bond yields (bearishness for bond prices).
Ashraf
I understand that inflation fears and overall deterioration of US govt borrowing will curb demand for Treasurys, driving down price and pushing yields up. This also falls in line with your general views on USD strength against risk currencies. One thing I had a question about is that yields tend to trade in the direction of the equities market. Can we expect to see a situation of falling equities in addition to rising 10 yr yields? Thank you.
Ashraf