Technical Analyst, Saxo Bank
US 10 year Treasury Note Future has bounced off from strong support at $121. A bounce to $124 is not unlikely. Trend would still be down and selling pressure could resume.
Bigger picture on monthly the Treasury futures has unfolded a big Shoulder-Head-Shoulder pattern reaching 100% of the Neckline to Head distance (illustrated by two blue arrows) AND tested the longer term rising trend line. If the T-Note future breaks below 121 there are no strong support before 117
Euro Bund future is testing lows at €156.22. A price level not seen since 2018. If closing below €156 Euro Bund future is likely to drop down to around €150 possibly lower.
RSI is below 40 threshold for the first time since 2008! Still have one more day of March to move back up above but it is not very likely that scenario will unfold. Euro Bund future is in negative sentiment and is likely to drop further.
However, corrections will occur obviously, and a correction from current level should be expected. A correction of 0.382 Fibonacci at around €162 is not unlikely.
UK Gilt testing key support at £119.60. RSI divergence on Weekly indicates we could see a (minor) correction from here, possibly up to around 125.
The support level at around 119.60 is fairly strong as illustrated on the Monthly chart. The 200 monthly SMA is offering support. However, monthly RSI is below 40 and has been for a couple of months by now with no divergence indicating we could lower levels in coming months. .
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.