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The Monthly Banker: 4 July 2016

US 2yr Bond Yield rebounds off 0.5%




The mid-June rally by the US 2-year Bond Yield encountered stiff resistance at both the 50 and 200-day Moving Averages this week, near 0.785%.  The yield fell sharply on 24 June to around 0.5%, where intraday support arrived.  The bounce has continued in subsequent days, though a move back through last week's barrier would be required to improve this pattern in a significant manner.


US - The 10-year Treasury Bond future found support at the 50-day MA with an upward dynamic, namely a 'Trough' Key Day Reversal, on 24 June.  The price jumped up to a new contract high, at 134.219, before pausing.  This is in keeping with the overbought RSI indicator.


UK - The Long Giltinstrument similarly encountered firm support at the shorter-term MA; and leapt up to a new contract high.  Prices have remained near those levels, at around 128, though we would point out that the RSI is overbought again.


Europe - The Euro 5-year Bobl issue maintained uptrend support at the 50-day MA this week.  The price gapped up to a new contract high at 134.12 in this case too, before retracing somewhat.  Note the RSI indicator is signalling an overbought state again.



Asia - Having become overbought in mid-June, theJapanese Government Bond future reacted.  That pullback found uptrend support at the 50-day MA with a bullish key reversal, and promptly reversed up to a fresh contract high. 

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