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10 Dec 2014
Bund rebound helps flatten the Treasury curve – JPM
FXStreet (Barcelona) - The Research Team at J.P.Morgan note that the Bund rebound helped flatten the Treasury curve after Friday’s strong payrolls report.
Key Quotes
“10yr Bunds (DBR 1 ½ 05/15/24) rebound after holding June channel support, which now rests at 0.74%. Nearby resistance includes the 0.67% Oct 15 rich, 0.665% Nov 2013 Elliott 5th-wave objectives, and 0.65% Dec 1 all-time yield low.”
“Longer term resistance is clustered at the 0.63% 2009-2011 range measure, 0.57% Apr 2011-Sept 2013 .618 swing target, and 0.51% (where the scope of the 2007 bull market matches the 1994 bull trend). Momentum is bearishly diverging and the market could be tracing out an ending diagonal. While both favor a material trend reversal, we are waiting for price action to confirm given the strength of Bunds this year. Closes cheaper than 0.74-0.75% would be a good start. Next support rests at 0.81-0.83% Nov range cheaps, then the critical 0.86-0.875% inflection.”
Key Quotes
“10yr Bunds (DBR 1 ½ 05/15/24) rebound after holding June channel support, which now rests at 0.74%. Nearby resistance includes the 0.67% Oct 15 rich, 0.665% Nov 2013 Elliott 5th-wave objectives, and 0.65% Dec 1 all-time yield low.”
“Longer term resistance is clustered at the 0.63% 2009-2011 range measure, 0.57% Apr 2011-Sept 2013 .618 swing target, and 0.51% (where the scope of the 2007 bull market matches the 1994 bull trend). Momentum is bearishly diverging and the market could be tracing out an ending diagonal. While both favor a material trend reversal, we are waiting for price action to confirm given the strength of Bunds this year. Closes cheaper than 0.74-0.75% would be a good start. Next support rests at 0.81-0.83% Nov range cheaps, then the critical 0.86-0.875% inflection.”