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)

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