Technical Update - US 2- and 10-year Treasury yields and Notes. German 10-year Government Bond yield and Bund future

Technical Update - US 2- and 10-year Treasury yields and Notes. German 10-year Government Bond yield and Bund future

Bond 4 minutes to read
KCL
Kim Cramer Larsson

Technical Analyst, Saxo Bank

Summary:  Both US and European Government yields dropped sharply the past week to test key levels. It is now correction time and yields are set to regain lost grounds. but how much?


Today's Saxo Market Call podcast.
Today's Market Quick Take from the Saxo Strategy Team

US 2-year Treasury yields broke below 4% support and dipped below the falling trendline only to close above and to close above the 200 daily Moving Average (MA).
During the downwards move RSI has shown divergence indicating an exhaustion of the trend. This morning 2-year yields are crawling back above 4% and if closing above we could see further upside to the 0.618 retracement at 4.47.
Minor resistance at 4.22 which will be key for further upside and resistance around the 55 and 100 daily Moving Averages.
A drop back below the 200 daily MA would strongly indicate down trend to resume and be extended below the falling trendline

2yyield d 21mar
Source all charts and data: Saxo Group

US 2-year Treasury Note future spiked to the 1.382 projection of the January-February downtrend. If closing below 103 8/32 a correction down to around 102 13/32 could be seen.

2ynote d 21mar


US 10-year Treasury yields spiked below January/February trough and support at 3.32 only to bounce strongly. At the time of writing back above the 200 daily MA and could bounce further. If breaking above 3.60 there could be upside to the 0.618 retracement at around 3.78.
For 10-year yields to resume downtrend a close below 3.32 is needed. If that occurs a move to around 35 would be in the cards

10yyield d 21mar

Levels on the Treasury Note future: Spiked above January peak at 116 8/32 to collapse and now back below 200 daily MA. A correction down to the 0.618 retracement at 112 26/32 could be seen.
A close above 116 8/32 will extend uptrend possibly up to around 118 15/32

10ynote d 21mar

German Government Bond 10-year yield spiked just below support at around 1.97 to just a few points from the lower medium-term rising trendline. Yields has rebounded strongly and if moving above 2.97 a 0.618 retracement at around 2.45 could be seen. If yields closes back below 1.97 a new downtrend is likely to around 1.76 support

G10yyield d 21mar
Source: TradingView

EuroBund future ran out of steam a few cents below resistance at around 140.68. If closing back below 136 bear trend is likely to resume.
For the Bund future to break bullish a close above 140.68 is needed. That could lead to a move to around 143.38 resistance

Bund d 21mar

Quarterly Outlook

01 /

  • Macro Outlook: The US rate cut cycle has begun

    Quarterly Outlook

    Macro Outlook: The US rate cut cycle has begun

    Peter Garnry

    Chief Investment Strategist

    The Fed started the US rate cut cycle in Q3 and in this macro outlook we will explore how the rate c...
  • Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Quarterly Outlook

    Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Althea Spinozzi

    Head of Fixed Income Strategy

  • Equity Outlook: Will lower rates lift all boats in equities?

    Quarterly Outlook

    Equity Outlook: Will lower rates lift all boats in equities?

    Peter Garnry

    Chief Investment Strategist

    After a period of historically high equity index concentration driven by the 'Magnificent Seven' sto...
  • FX Outlook: USD in limbo amid political and policy jitters

    Quarterly Outlook

    FX Outlook: USD in limbo amid political and policy jitters

    Charu Chanana

    Chief Investment Strategist

    As we enter the final quarter of 2024, currency markets are set for heightened turbulence due to US ...
  • Commodity Outlook: Gold and silver continue to shine bright

    Quarterly Outlook

    Commodity Outlook: Gold and silver continue to shine bright

    Ole Hansen

    Head of Commodity Strategy

  • FX: Risk-on currencies to surge against havens

    Quarterly Outlook

    FX: Risk-on currencies to surge against havens

    Charu Chanana

    Chief Investment Strategist

    Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperfo...
  • Equities: Are we blowing bubbles again

    Quarterly Outlook

    Equities: Are we blowing bubbles again

    Peter Garnry

    Chief Investment Strategist

    Explore key trends and opportunities in European equities and electrification theme as market dynami...
  • Macro: Sandcastle economics

    Quarterly Outlook

    Macro: Sandcastle economics

    Peter Garnry

    Chief Investment Strategist

    Explore the "two-lane economy," European equities, energy commodities, and the impact of US fiscal p...
  • Bonds: What to do until inflation stabilises

    Quarterly Outlook

    Bonds: What to do until inflation stabilises

    Althea Spinozzi

    Head of Fixed Income Strategy

    Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain ...
  • Commodities: Energy and grains in focus as metals pause

    Quarterly Outlook

    Commodities: Energy and grains in focus as metals pause

    Ole Hansen

    Head of Commodity Strategy

    Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities i...

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
Full disclaimer (https://www.home.saxo/legal/disclaimer/saxo-disclaimer)

Saxo Bank A/S (Headquarters)
Philip Heymans Alle 15
2900
Hellerup
Denmark

Contact Saxo

Select region

International
International

Trade responsibly
All trading carries risk. Read more. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more

This website can be accessed worldwide however the information on the website is related to Saxo Bank A/S and is not specific to any entity of Saxo Bank Group. All clients will directly engage with Saxo Bank A/S and all client agreements will be entered into with Saxo Bank A/S and thus governed by Danish Law.

Apple and the Apple logo are trademarks of Apple Inc, registered in the US and other countries and regions. App Store is a service mark of Apple Inc. Google Play and the Google Play logo are trademarks of Google LLC.