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Analysis & Comment  > The Monthly Banker

The Monthly Banker: 10 April 2014

US 10yr Bond Yield retreats from 2.8% barrier


Once again, the US 10 year Bond Yield has been knocked back by sideways resistance near 2.8% during the week.  Valuations have drifted back to support at another lateral region around 2.6%.  Note also that that platform is reinforced by the presence of the 200-day moving average.  Should it ultimately crumble, however, the overall pattern would look increasingly top heavy; and a further slide towards the next chart support at the late-2013 floor printed at 2.4691%.


Weekly Comment:


Government Bond Futures 


US - The 5 year Treasury Note reaffirmed support along 118.5 by plotting an upward dynamic on 4 April.  The ensuing recovery has the instrument pointing back towards resistance at the 200-day moving average.


UK - The sideways area along 109 produced a bounce over the course of the week.  Although the rebound has delayed lower levels towards the floor near 106, a sustained clearance of the barrier around 111 is required to further improve the outlook for UK Gilt futures.

Europe - The Euro 30 year Buxl instrument broke above a multi-month base formation earlier in the year.  Since then, the item has ranged sideways, in response to the overbought RSI back then, although a new high was hit during this phase, near 130.  That level is actually close to a long-term lateral region, dating back to mid-2011, and is holding up the advance.  Still, a breach of support along 126 is needed to further delay an upside breakout.

Asia - Australian 10 year Bond futures failed to maintain the nudge beneath the sideways area along 95.80.  This has led to a 'bear trap' recovery by the instrument.  Important resistance is at the February/March ceiling near 96.10.

Central Bank Action 


The Bank of England has left rates at record lows again today, at 0.5%.

Please note UK Corporate bonds can only be purchased over the phone please contact us on 0845 607 6002

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