Technical Analyst, Saxo Bank
Government bonds has taken a hit over Christmas and New Year breaking out of corrective patterns and below key supports.
Further sell offs are likely across the board.
10 Year US T-Note broke bearish out of its symmetrical triangle like pattern taking out support at around USD130 with ease. Trough low – and rebound - from November didn’t offer any support whatsoever with sellers continuing the pressure today. RSI is back below 40 i.e. confirming bearish trend.
From the weekly chart we can see there is not support until at around USD128. RSI is below 40 testing the rising trend line . A close below can accelerate the selling pressure.
Similar picture on the US T-Bond. On weekly the T-Bond has broken out of a symmetrical triangle pattern and could be headed for the lowest level in the triangle at around USD 153. RSI is supporting the bearish move
Euro Bund. After breaking bearish out of its rising channel Euro Bund has continued its downwards move taking out the support at around EUR172.48 now trading below 55 SMA.
RSI is below 40 supporting the bearish mood which could extend to EUR 169.92 support on the short term.
On the weekly chart Euro Bunds formed a top and reversal candle over the Christmas week in the form of a Bearish Engulfing. RSI is bearish which indicates we could see soon see a test of 200 weekly SMA and possibly a test of the support at around EUR 167.61
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.