Technical Analyst, Saxo Bank
US 10-Year Treasury Yields look ripe for a correction. Divergence on RSI indicating the uptrend is stretched. If yields close below the steep rising lower trendline a correction down to 3.64-3.56 could be seen. Support at 3.85.
The US 10-Year Treasury Note future is testing its short-term falling trend line. Down trend is stretched, and the future could see a correction up to key strong resistance at around 114. Some resistance at 11 28/32.
If the future drops back and takes out lows at 108 26/32 and RSI closes below its lower rising trendline further down trend is confirmed.
The T-Note Future has dipped below support at 111, down to levels not seen since 2007 in what looks like 5th exhaustive vawe lower reaching 0.618 Extension of vawe 3 and 1.618 projection of the 4th corrective vawe. It would be classic exhaustion levels for a 5th vawe.
RSI is at levels not seen in decades but there is no divergence. However, if RSI breaks above its falling trend line a larger correction could be seen.
Euro Bund future has formed a Doji Evening Star bottom and reversal pattern on the daily time period. RSI divergence supports the correction scenario which can take the und future to resistance at around 142.62.
If RSI fails to break above the 60 threshold bear trend could resume.
2024: The wasted year
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.