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23 Feb 2015
Technical outlook: Short-term treasuries oversold – RBS
FXStreet (Barcelona) - William O’Donnell, Head of US Treasury Strategy at RBS, gives the technical outlook for US treasuries, viewing that technicals for benchmark rates are pretty mixed with short term studies hinting at oversold conditions while long term studies stay overbought.
Key Quotes
“Treasuries are modestly higher as markets await Yellen's testimony tomorrow.”
“Bunds and Gilts are weaker (though off the overnight lows) and peripheral EU debt spreads have tightened with Greek 10yr spreads ~60bp tighter this morning. Portuguese 10yr rates fell below 10y Treasury yields for the first time since 2007 this morning."
“Our overnight US rates flows saw bank portfolio buying in 3's, 7's and 10's and some scattered paying in 10yr rate. Overnight inter-dealer Treasury volume (4pm to 6am) was 98% of the 10-day average volume for the overnight session.”
“2s (0.638%)– 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 mixed and still oversold.”
“5s (1.60%)– Next major support comes in at 1.80% and just above. Nearby resistance lines up at ~1.49%. Daily momentum is mixed and still oversold.”
“10s (2.12%)–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 mixed but into oversold readings.”
“30s (2.725%)– Bonds don't have any solid support until 3.105%, the November "lows." Local resistance is ~2.54%. Daily momentum is mixed and still showing oversold readings.”
Key Quotes
“Treasuries are modestly higher as markets await Yellen's testimony tomorrow.”
“Bunds and Gilts are weaker (though off the overnight lows) and peripheral EU debt spreads have tightened with Greek 10yr spreads ~60bp tighter this morning. Portuguese 10yr rates fell below 10y Treasury yields for the first time since 2007 this morning."
“Our overnight US rates flows saw bank portfolio buying in 3's, 7's and 10's and some scattered paying in 10yr rate. Overnight inter-dealer Treasury volume (4pm to 6am) was 98% of the 10-day average volume for the overnight session.”
“2s (0.638%)– 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 mixed and still oversold.”
“5s (1.60%)– Next major support comes in at 1.80% and just above. Nearby resistance lines up at ~1.49%. Daily momentum is mixed and still oversold.”
“10s (2.12%)–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 mixed but into oversold readings.”
“30s (2.725%)– Bonds don't have any solid support until 3.105%, the November "lows." Local resistance is ~2.54%. Daily momentum is mixed and still showing oversold readings.”