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The Monthly Banker: 2 October 2014

Greek 10yr Yield basing...


Greek 10yr Yield basing...


The Greek Government 10-year Bond Yield spent most of September rallying from the floor area near 5.5%.  By the end of the month, the RSI was indicating an overbought condition.  Some hesitation is evident on the chart, with the 200-day moving average blocking the way.  The last time, the yield did cross that line was back in mid-2012.

Still, the pattern over the last six months may yet turn out to be a base formation.  A clearance of the 200-day MA and May high near 7% would add weight to that theory.


Weekly Comment:


Government Bond Futures 


US - The Eurodollar future had been ranging quietly around the 99.75 mark for some weeks.  This followed the last rebound from the floor near 99.70.  Over the course of this week, the price has lifted out of that tight range, rallying to a new contract high.  A fall beneath the 50-day moving average would be required to damage the near-term uptrend.


UK - Having encountered support at 111.32, the Long Gilt future has now completely retraced the pullback from the late-August high at 113.92.  In fact, the contract nudged above that level during yesterday's session.  We would point out that the RSI has approached overbought territory once again, increasing the risk of another correction over the short term.


Europe - The Euro 10-year Bund future found firm support at the 50-day moving average last month, at 147.63.  The resulting rally has cleared the late-August high near 150.  The RSI is indicating an overbought condition, though a fall beneath the shorter-term MA line would be required to break the upward tendency.


Asia - The Australian 10-year Bond Continuationchart has the RSI falling to oversold territory in September.  The ensuing recovery has continued to re-enter the mid-July/early-September top area.  A downward dynamic would have to be seen to offset current scope for further gains within that trading band, which stretches up to 96.74.


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