US 2Y Yield - Stable
US 10Y Yield - Rebound expected from the nearby 4.34% level
US10Y – US2Y - Aiming at zero
GER 10Y Yield - Should rebound from double bottom & 200dma
US10Y-GER10Y - On UT channel support
Two-year rates remained stable in the past week, and the expected drop towards 4.60% did not materialize while 10y rates look nearly ready to rebound. With a low conviction level, we will anticipate a rebound towards the monthly highs @ 5.08% before an eventual push lower.
Ten-year rates have nearly touched the 4.34% support zone, and the drop from the 5.01% high has unfolded in five waves. While the market could touch the nearby 4.34%, this could be considered as an opportunity to sell Treasuries.
The drop of the past three weeks seems to be nearing the end, and the nearby -0.65% level should hold as support. We expect a rebound towards zero over the coming few weeks.
Bund rates double bottomed @ 2.52% which also happens to be the 200dma support. A rebound towards 2.70 is expected.
The Note – Bund spread is near the support of the UT channel ignited late April 2023. We expect the support to hold for a short term rebound towards 1.95% before failing for good.
Disclaimers
About the Author: Joachim DJIAN
Author’s Conflict of Interest, if relevant: None
MUFPS Disclaimers:
This communication constitutes an investment recommendation within the meaning of the Market Abuse Regulation EU 596/2014 (MAR). The content has been prepared solely for the purpose of providing information to clients of Marina UFP SAS. This material contains the views, opinions, and trade ideas of author (sender) and should not be construed as investment advice as defined by the Markets in Financial Instruments Directive 2014/65/EU (MiFID II). Investors must make their own determination and investment decisions.
To discharge its obligations under MAR, Mariana UFP SAS has provided relevant disclosures regarding conflicts of interest as well as underlying assumptions, valuations or methodologies used to evaluate financial instruments or issuers or to set price targets, which can be found here https://marianaufp.com/regulatory/
Under MiFID II Delegated Regulation 2017/565 article 36 (2), this document is not Independent Investment Research and therefore: This document has not been developed in accordance with legal requirements designed to promote the independence of investment research and its author(s) is/are not subject to any prohibition on dealing in the relevant financial instrument ahead of the dissemination of the marketing communication.
This document is intended only for the use of the individuals or entities to which it is addressed and may not be altered, reproduced, redistributed, or passed on to any other third party, in whole or in part, without the prior written consent of Mariana UFP SAS. In the event of a written consent any alteration, reproduction, redistribution or passing this document to any other party would have to be performed in accordance with Chapter III of MAR Delegated Regulation 2016/958.
This communication has been prepared by Joachim Djian, a member of Mariana UFP SAS (“MUFPs”). MUFP is regulated by the ACPR and the AMF BIC code: 14483