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Treasuries trying to flip bullish again – RBS

FXStreet (Barcelona) - William O'Donnell, Head of US Treasury Strategy at RBS, shares the key developments in the global bond market and further gives the technical outlook for US treasuries.

Key Quotes

“Treasuries are a bit higher and the curve flatter as EU yields bang out record lows after the ECB's promise to stay with QE yesterday. Average German debt yields are negative for the first time (negative out to 9yr maturities) and Greek yields have soared today (3yrs +330bp to 28%; 10yrs at 13%) on talk of a request to delay their IMF payment and after warnings from German finance minister Schaeuble and others.”

“Greece has dragged other EU peripheral spreads wider, backed by selling (and poor spread technicals).”

“2s (0.488%)- Next major support doesn't emerge until ~0.80% where we found buyers back in the spring of 2011. Resistance seen at 0.40% where we'd close a gap left behind in late October. Daily momentum bullish but nearing overbought readings again.”

“5s (1.303%)- Next support sits at 1.46% and then stronger support comes in at 1.70% and just above. Next resistance begins at ~1.30% and extends down to major resistance at 1.15%. Daily momentum trying to flip bullishly again.”

“10s (1.87%)-Next resistance comes in some congestion in and around 1.80% then the low yields of 1.64%. Next support comes in ~2.20% with major support at 2.40% after that. Daily momentum is bullish again.”

“30s (2.524%)- Bonds have nearby support ~2.85% and then better support up near 3.10%. Next resistance around 2.40%. Daily momentum is trying to flip bullishly this morning.”

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