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Bond of the Week: 4 February 2016
French 10yr Yield slides again

The French 10-year Bond Yield was unable to maintain numerous breaks above 1% in the last few months of 2015. The start of 2016 saw the yield slip away from that barrier, even breaking support in the 0.8% region. Next important chart support is at the April platform at 0.33%. We would point out that the RSI indicator remains near oversold levels.

US - The 10-year Treasury Bond future passed the October peak area during the week. However, the RSI indicator remains overbought, increasing the risk of a correction before long. In fact, one notes that intraday resistance arrived at 130.75 on Wednesday, potentially signalling the start of such a phase.

UK - Following a short-lived pause at the very start of February, the Long Gilt instrument has continued to rally to new heights. A drop under the sideways area near 119 would be required to damage the outlook.

Europe - The Euro 2-year Schatz contract briefly hesitated by previously firm resistance at the early-December high before breaking clear of that barrier at 111.825. Still, the near-term rally remains overbought. This is confirmed by the high level of the RSI, which signals continuing danger of a corrective period before long.

Asia - Mid-January witnessed another shallow correction from overbought by JGBs. At the end of the month, the price shot up. Acceleration is a trend-ending feature; and the RSI is at an extremely elevated level. This confirms that the short-term rally is overbought again.

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