Technical Analyst, Saxo Bank
US 2-years Treasury yields is testing June peak at 3.45 forming what looks like an Ascending triangle like pattern. If yields close above 3.45 first target is 3.73 but a move to around 3.90-4.00% is likely.
If rejected at the 3.45 we could see US 2-year yields test the lower rising trendline.
However, RSI is above 60 with no divergence indicating higher levels are the most likely scenario
US 10-years Treasury yields is struggling to break the 3.11 resistance just peaking above to be rejected at the 0.618 retracement at 3.13. Now being rejected twice the past week it is having another go today. If closing above 3.13 there is some resistance at 3.27 but June peak at 3.50 is likely to be tested.
However, the US 10-years is moving in what looks like a rising wedge meaning if it is once again rejected and closes below 3%, a correction down to around the 0.618 retracement at 2.76 is likely.
However, RSI is above 60 and no divergence indication yields will break higher
The US 10-years Treasury future has broken below 0.618 retracement and support at 117 5/32. If it closes below, it has further confirmed the downtrend and is on course to test June lows at around 114 7/32. Some support at around 116
Euro Bunds gapped lower this morning below key support at 149.75 testing 0.618 retracement at 147.94. RSI is below 40 and no divergence indicating lower levels. We could see buyers trying to close the gap but the former support at 149.75 is now a strong resistance.
Some support at around 145.16
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.