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Analysis & Comment:  

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The Emerging Markets Bondhas reasserted the advance off the March floor, which had stalled near 114 earlier this month.  Once/if that high yields, the next chart resistance is at 114.46; the late-November barrier, which spurred the sharp sell off in December.  Given that steep pullback, it would seem reasonable to expect further hesitation near that level.

This Bar chart spans one year.  It also displays the formidable looking summer 2014 resistance around 116.  Naturally, it would take a push past the yearend highs (114.46 and 114.85) to clear the path for a revisit of that ceiling.

Weekly Comment:

 


Government Bond Futures 


 

US - The 2-year Treasury Note future has paused the uptrend at 109.805.  The current reaction from that high is fast approaching initial support at the earlier April low at 109.547; close to the sideways area along 109.60.  A sustained breach would be needed to interrupt the upward tendency.

 

UK - The Long Gilt has generated a bearish P&F Breakout signal on the automated scanner following the fall through 120.25.  This Candlestick chart shows the price breaking support at the sideways area near 120; close to the 50-day MA, leaving it vulnerable to further slippage towards the longer-term MA line.

 

Europe - The Euro 5-year Bobl future has failed to maintain the break over the February to early-April ceiling near 129.50.  Unless the 50-day MA can provide uptrend support, there is a risk of further 'bull trap' slippage over the near term, possibly towards support along the 129 area.

 

Asia - The Australian 3-year Bond instrument has continues to slide from the early-April high near 98.40 to break uptrend support at the 50-day MA.  Prices seem about to challenge support at the March floor, which is close to the short-term lateral region along 98.