Technical Update - US 10-year yields could drop to 3.22. US and EU interest rate futures in uptrends. UK Gilt could be range bound Technical Update - US 10-year yields could drop to 3.22. US and EU interest rate futures in uptrends. UK Gilt could be range bound Technical Update - US 10-year yields could drop to 3.22. US and EU interest rate futures in uptrends. UK Gilt could be range bound

Technical Update - US 10-year yields could drop to 3.22. US and EU interest rate futures in uptrends. UK Gilt could be range bound

Bonds 4 minutes to read
KCL
Kim Cramer Larsson

Technical Analyst, Saxo Bank

Summary:  US 10-year Treasury yields broke below key support and could drop to 3.22. The future is in an uptrend looking at key resistance at 117
Euro Bund continues strong bounce off lows breaking bullish out of falling wedge. 143.38 is key resistance
UK Gilt seems to be struggling for momentum and could be range bound for quite some time


Today's Saxo Market Call podcast.
Today's Market Quick Take from the Saxo Strategy Team

US 10-year Treasury yields closed yesterday below key support at around 3.41. Yields are set for lower levels and is likely to drop below 200 daily SMA and test 0.618 retracement at 3.22. That is also the 1.382 projection of the December correction.

Source all charts and data: Saxo Group

US 10-year Treasury Note future is in an uptrend short-term after its close yesterday above 115 12/32 and could be forming a rising channel like pattern. 
Currently testing 200 daily SMA and seems likely to move higher to the 0.618 retracement at 117. RSI above 60 and no divergence supports the short-term bullish picture.
Medium-term the T-Note has reversed the downtrend if it closes the week above 115 12/32. 117 could be key for the T-Note. If the T-Note gets rejected at 117 AND RSI does not close above 60 threshold on weekly chart we could see selling returning.

Euro Bund future is continuing its strong bullish bounce supported by RSI above 60 and Bollinger bands expansion i.e., in positive sentiment. The Euro Bund is set to move higher to test key resistance at 143.38.
On weekly chart we can see Euro Bund has broken bullish out of its falling wedge like pattern. A move to the 0.382 retracement of the wedge at 143.03 is likely. Just a few points below key resistance at 143.38. RSI breaking above its upper falling trend line supports this bullish scenario.
If Euro Bund manages to close above 143.38 we could see further upside to the 0.618 retracement at 149.40.
If selling pressure returns and push the Bund future to close below 136 down trend is set to resume.

 

UK Gilt seems to be struggling getting past the 0.618 retracement level at 105.20 despite RSI being above 60 and thereby in positive territory. If it succeeds there is strong resistance at around 108.92. The declining daily 200 SMA will provide resistance around that level.
Gilt could be range bound between 109 and 99 for quite some time.

Medium-term: The gap on the weekly chart is crucial for Gilt. If Gilt closes the gap new lows are likely. If Gilt can close above 108.92 there is upside potential to 0.786 retracement at 113.54.

 

Quarterly Outlook 2024 Q3

Sandcastle economics

01 / 05

  • Macro: Sandcastle economics

    Invest wisely in Q3 2024: Discover SaxoStrats' insights on navigating a stable yet fragile global economy.

    Read article
  • Bonds: What to do until inflation stabilises

    Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain inflation and evolving monetary policies.

    Read article
  • Equities: Are we blowing bubbles again

    Explore key trends and opportunities in European equities and electrification theme as market dynamics echo 2021's rally.

    Read article
  • FX: Risk-on currencies to surge against havens

    Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperform in Q3 2024.

    Read article
  • Commodities: Energy and grains in focus as metals pause

    Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities in Q3 2024.

    Read article
Disclaimer

Saxo Capital Markets (Australia) Limited prepares and distributes information/research produced within the Saxo Bank Group for informational purposes only. In addition to the disclaimer below, if any general advice is provided, such advice does not take into account your individual objectives, financial situation or needs. You should consider the appropriateness of trading any financial instrument as trading can result in losses that exceed your initial investment. Please refer to our Analysis Disclaimer, and our Financial Services Guide and Product Disclosure Statement. All legal documentation and disclaimers can be found at https://www.home.saxo/en-au/legal/.

The Saxo Bank Group entities each provide execution-only service. Access and use of Saxo News & Research and any Saxo Bank Group website are subject to (i) the Terms of Use; (ii) the full Disclaimer; and (iii) the Risk Warning in addition (where relevant) to the terms governing the use of the website of a member of the Saxo Bank Group.

Saxo News & Research is provided for informational purposes, does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. No Saxo Bank Group entity shall be liable for any losses that you may sustain as a result of any investment decision made in reliance on information on Saxo News & Research.

To the extent that any content is construed as investment research, such content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication.

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments.Saxo Capital Markets does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo Capital Markets or its affiliates.

Please read our disclaimers:
- Full Disclaimer (https://www.home.saxo/en-au/legal/disclaimer/saxo-disclaimer)
- Analysis Disclaimer (https://www.home.saxo/en-au/legal/analysis-disclaimer/saxo-analysis-disclaimer)
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)

Saxo Capital Markets (Australia) Limited
Suite 1, Level 14, 9 Castlereagh St
Sydney NSW 2000
Australia

Contact Saxo

Select region

Australia
Australia

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit www.home.saxo/en-au/about-us/awards

Saxo Capital Markets (Australia) Limited ABN 32 110 128 286 AFSL 280372 (‘Saxo’ or ‘Saxo Capital Markets’) is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms, Financial Services Guide, Product Disclosure Statement and Target Market Determination to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Saxo Capital Markets does not provide ‘personal’ financial product advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Capital Markets does not take into account an individual’s needs, objectives or financial situation. The Target Market Determination should assist you in determining whether any of the products or services we offer are likely to be consistent with your objectives, financial situation and needs.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc.

The information or the products and services referred to on this website may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and Services offered on this website is not intended for residents of the United States and Japan.

Please click here to view our full disclaimer.