Quarterly Outlook
Equity outlook: The high cost of global fragmentation for US portfolios
Charu Chanana
Chief Investment Strategist
Access both platforms from your single Saxo account.
Technical Update - US 10-year Treasury yields could reach 5.25% before exhaustion
Kim Cramer Larsson
Technical Analyst, Saxo Bank Group
Summary: Using Elliott Wave analysis, combined with Fibonacci projections and historic yield and future levels there is strong indications that US 10-year yields could reach 5.25% before exhaustion
Future can decline to 103 20/32
I rarely show Elliot Wave counts on my charts unless they seem quite clear, but looking at the monthly chart of the US 10-year Treasury Future and Yields we can see five clear waves and we seem to be in the 5th exhaustive wave.
Wave 5 should be at least the length of wave 1, that’s roughly where we are now as illustrated by the two vertical arrows, but usually between 1.382 and 1.618 projection of wave 4. That is 105 22/32 and 103 24/32 respectively.
The latter i.e., the 1.618 projection at 103 24/32 is very close to the double bottom low back in 2006-2007.
Yields to 5.25?
The inverse picture of the future, the yields chart (unfortunately, this is just a line chart so we do not have the troughs and peaks but only the closing prices which are less extreme than the closing prices) the yields peaked just around 5.25% back in 2007.
Yields formed a Double Top pattern in 2006-2007 with a base (called a Valley) around 4.43. 10-year yields have surpassed the “base level” and is now in the “Double Top” area with no strong resistance until 5.25 i.e., the Double Top pattern peak.
Monthly RSI is showing divergence as indicated by the horizontal blue line, the current value is below. But if RSI is closing a month (RSI is working with closing prices on the time period) above the horizontal line it would indicate even higher levels than the 5.25%.
Note:It should be noted, however, that wave 5 can move further than the 1.618 projection of wave 4 (on the future) but since we have a Double Bottom(the future)/Double Top pattern back in 2006-2007 I believe that bottom/peak level to be the exhaustive level
Very short-term on the Daily chart yields uptrend is quite stretched but according to the RSI indicator they can move higher. Ther is no divergence i.e., the higher yields are confirmed by higher RSI values.
However, with RSI values being above 75 i.e., in overbought territory a short-term correction should be expected before a likely push higher.
First indication of a correction could be RSI breaking below its risisng blue trnedline possibly combined with a top and reversal pattern on the yields
For Yields to demolish this scenario of a move to 5.25 a close below 4.35 is needed as the technical picture currently is drawn
Latest Market Insights
Quarterly Outlook
Equity outlook: The high cost of global fragmentation for US portfolios
Quarterly Outlook
Commodity Outlook: Commodities rally despite global uncertainty
Quarterly Outlook
-
-
Quarterly Outlook
Commodity Outlook: Commodities rally despite global uncertainty
Ole Hansen
Head of Commodity Strategy
-
Quarterly Outlook
Upending the global order at blinding speed
John J. Hardy
Global Head of Macro Strategy
We are witnessing a once-in-a-lifetime shredding of the global order. As the new order takes shape, ... -
Quarterly Outlook
Asset allocation outlook: From Magnificent 7 to Magnificent 2,645—diversification matters, now more than ever
Jacob Falkencrone
Global Head of Investment Strategy
-
Quarterly Outlook
Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?
John J. Hardy
Global Head of Macro Strategy
-
Quarterly Outlook
Equity Outlook: The ride just got rougher
Charu Chanana
Chief Investment Strategist
-
Quarterly Outlook
China Outlook: The choice between retaliation or de-escalation
Charu Chanana
Chief Investment Strategist
-
Quarterly Outlook
Commodity Outlook: A bumpy road ahead calls for diversification
Ole Hansen
Head of Commodity Strategy
-
Quarterly Outlook
FX outlook: Tariffs drive USD strength, until...?
John J. Hardy
Global Head of Macro Strategy
-
Quarterly Outlook
Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges
Althea Spinozzi
Head of Fixed Income Strategy
Disclaimer
The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research 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. To the extent that any content is construed as investment research, you must note and accept that the 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 under relevant laws.
Please read our disclaimers:
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/en-gb/legal/disclaimer/saxo-disclaimer)