25 Feb 2015
Expect no higher break in US treasuries – KBC
FXStreet (Barcelona) - The KBC Bank Research Team shares the outlook and comments on yesterday’s reaction by bunds and treasuries post news of Greece’s agreement and Yellen’s testimony.
Key Quotes
“Yesterday, global core bonds parted ways. The Bund traded with a downward bias in the European session as Greece and Europe finally agreed on a 4-month bailout extension. US Treasuries were dominated by Yellen’s testimony.”
“While, we didn’t see much changes in the FOMC view versus the January meeting, when the testimony was prepared, Treasuries were clearly positioned for a more hawkish chairwoman. So, when that didn’t materialize, Treasuries climbed substantially higher, but failed to take out key resistance.”
“Technically, the US Note future broke below the (previous) 128-23+ support (neckline double top), but retested this level following Yellen’s testimony. We expect no break higher (1.94% support in US 10-yr yield).”
“The Bund remains in the narrow 157.97-159.54 range. Longer term, we hold our view that ECB QE buying limits upward potential in EMU bond yields.”
Key Quotes
“Yesterday, global core bonds parted ways. The Bund traded with a downward bias in the European session as Greece and Europe finally agreed on a 4-month bailout extension. US Treasuries were dominated by Yellen’s testimony.”
“While, we didn’t see much changes in the FOMC view versus the January meeting, when the testimony was prepared, Treasuries were clearly positioned for a more hawkish chairwoman. So, when that didn’t materialize, Treasuries climbed substantially higher, but failed to take out key resistance.”
“Technically, the US Note future broke below the (previous) 128-23+ support (neckline double top), but retested this level following Yellen’s testimony. We expect no break higher (1.94% support in US 10-yr yield).”
“The Bund remains in the narrow 157.97-159.54 range. Longer term, we hold our view that ECB QE buying limits upward potential in EMU bond yields.”