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The Monthly Banker: 21 May 2015

US 10yr Bond Yield consolidates gains...



The rally from April floor near 1.8%, by the US 10-year Bond Yield, became overbought by the start of the month.  Note the high level of the RSI indicator to that effect.  The advance has spilled over into a ranging phase, with resistance arriving near the long-term lateral area around 2.4% (partially shown).  At present, this sideways trading action appears to be part of a consolidation period before that barrier is overcome.  When/if that occurs, next chart resistance is around 2.7%, from the mid-May to September 2014 highs.



Weekly Comment:


Government Bond Futures 



US - The high level of the RSI indicates that the rally by the Eurodollar future is overbought again.  In fact, a slight drift from the latest high, at 99.72, is apparent.  However, a more forceful downward move would be required in order to seriously damage the pattern.


UK - The oversold decline from 122 has yielded to ranging for the Long Giltfuture.  Support at the early-May low, near 116, held during the week.  Still, a clearance of initial resistance at 118.83 would still be needed to confirm a failed break under the March low (bear trap).


Europe - Support at the early-May oversold low near 152 was successfully tested by the Euro 10-year Bundfuture.  That said, there are still signs of a reluctance to pass the 155 region.  A clearance provide further evidence that a short-term base is forming.


Asia - The Australian 3-year Bond Continuationchart displays a top heavy pattern between approximately 98.4 and 98.  The current bounce is occurring because the recent decline had become oversold.  Nonetheless, a sustained push over the sideways area along 98 would be needed to indicate scope for a further 'bear trap' recovery.

Weekly Analysis


Symbol Name Comment Close 1 day Support Resistance
TUM5 US 2yr T-Notes (Jun 15) Continues to find resistance at the Apr ceiling. 109.672 +0.0% 108.773 109.805
FVM5 US 5yr T-Notes (Jun 15) Broadly rangebound beneath the Jan-Apr ceiling near 121. 119.781 +0.2% 117.672 120.938
DUM5 Euro 2yr Schatz (Jun 15) Finds support near the 200-day MA again. 111.19 +0.0% 110.825 111.305
OEM5 Euro 5yr Bobl (Jun 15) Reasserts the recovery from the oversold and accelerated low. 128.52 +0.0% 127.75 129.79
RXM5 Euro 10yr Bund (Jun 15) Reaffirms support at the oversold early-May low. 153.67 -0.1% 151.01 160.69
UBM5 Euro 30-year Buxl (Jun 15) Failed break under the early-May oversold low (bear trap). 158.02 -0.2% 146.58 181.54
JBM5 10-year JGB (Jun 15) Extends the m-t range/top after the failed break under the pattern. 147.32 -0.0% 145.6 148.58
YMM5 Australian 3-year Govt Future (Jun 15) Recovery from oversold struggles at the sideways area near 98; close to the 200-day MA. 97.89 0.00% 97.73 98.42
XMM5 Australian 10-year Govt Futures (Jun 15) Rally from oversold pauses by the lateral region near 97.2. 97.03 -0.0% / 97.75
L M5 Short Sterling (Jun 15) Ranging near the 23 Apr 2013 peak (99.44). 99.43 +0.0% 99.28/99.34 99.44
ERM5 Euribor 3m (Jun 15) Trades near the highs. 100.015 +0.0% 99.925 /
EDM5 Eurodollar (Jun 15) Overbought rally slows. 99.71 -0.0% 99.52 /
G M5 Long Gilt Future Jun 15 Oversold decline yields to ranging. 116.9 -0.1% 113.99 123.07
TYM5 US 10 yr T-Bond Future S-t fall yields to ranging near Mar support. Confined by the 50-day MA. 127.266 +0.2% 124.609 131.172

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