1 Jul 2013
Flash: 10-year US treasuries could move to 3.00% – ANZ
FXstreet.com (New York) - Although the broad focus for 10-year US treasuries was on the break above 2.38-40%, confirming the signals for a long-term base having formed, near-term profiles suggest some corrections into next week in order to offset the aggressive surge to 2.665%, notes Tim Riddell, Head of Global Markets Research at ANZ.
Short-term outlook could hit 3.00%
Moreover, 2.40% should now act as yield support and affirm the break into a rising trend in yield. Initial moves off 2.665% are fitting into a tight corrective pattern, and yields could hold above 2.45%. Although a slip to 2.38% should not be ignored, and it could cause some concern, a base should form, allowing for a rise to test 2.70-75% within potential moves to 3.00%.
According to Riddell, “The weekly chart profile highlights the basing structure of the past three years (a classic end cycle formation from 2010’s 4% high). The move above 2.00-20% was the initial signal that a base had formed. The aggressiveness with which yields broke above 2.38-40% indicates that a move into an uptrend, rather than a holding pattern or trading range, is now developing. This also suggests that if short-term pullbacks hold neatly above 2.45% yields could post a swift push to test the 3.00% level (61.8% of the range seen over the past four years).”
Short-term outlook could hit 3.00%
Moreover, 2.40% should now act as yield support and affirm the break into a rising trend in yield. Initial moves off 2.665% are fitting into a tight corrective pattern, and yields could hold above 2.45%. Although a slip to 2.38% should not be ignored, and it could cause some concern, a base should form, allowing for a rise to test 2.70-75% within potential moves to 3.00%.
According to Riddell, “The weekly chart profile highlights the basing structure of the past three years (a classic end cycle formation from 2010’s 4% high). The move above 2.00-20% was the initial signal that a base had formed. The aggressiveness with which yields broke above 2.38-40% indicates that a move into an uptrend, rather than a holding pattern or trading range, is now developing. This also suggests that if short-term pullbacks hold neatly above 2.45% yields could post a swift push to test the 3.00% level (61.8% of the range seen over the past four years).”