Seasonals on 10-Year Suggest Retest of Lows


By Rom Badilla, CFA

July 11, 2012

Yesterday on “Technicals on Tens”, we pointed out that the yield on the 10-Year should decline once breaking out of the sideways symmetrical triangle and retest the all-time lows of 1.44% in continuation of the downward intermediate trend. Here’s more technical analysis courtesy of Bank of America Rates Strategist, MacNeil Curry in their U.S. Rates Weekly Publication from July 6 that suggest the market should expect lower rates:

“With seasonal turning bullish (10s have rallied for 6 consecutive Julys and 8 consecutive Augusts) a break of 1.43% opens 9yr channel resistance at 1.39% while ultimately we could see a move to 1.00% before longer term signs of basing emerge.”

Bond Trading - Seasonals on 10-Year (Courtesy of BAC)

The above content is provided for educational and informational purposes only, does not constitute a recommendation to enter in any securities transactions or to engage in any of the investment strategies presented in such content, and does not represent the opinions of Bondsquawk or its employees.



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