US 2Y Yield - The April high looks solid
US 10Y Yield - Soon expected to turn South
US10Y – US2Y - Short-term DT still has further to go
GER 10Y Yield - Perfectly flat 200dma
US10Y-GER10Y - Short term bounce expected
The 5.04% top at the end of April looks solid. Two-year rates are probably near the end of the rebound ignited from 4.70% last week and are expected to soon reverse and eventually reach the yearly lows @ 4.11% over the coming months.
We expect the 4.52% recent pivot high to provide resistance, and Ten-Year yields should soon get back on a down trend, ultimately targeting the yearly low @ 3.78%
Currently on a support, the 10Y – 2Y spread might bounce softly from here, but the DT ignited from the April high @ -0.28% does not seem over. We expect the spread to eventually reach the Dec 2023 low @ -0.53% before getting back on a bullish trend.
Bund yields have been trading sideways for most of the past three months and the 200dma has been nearly perfectly flat all year. We expect Bund yields to eventually get back on a bearish trend aiming at the late 2023 low @ 1.89%. A first confirmation would come with a break below 2.39%.
The Note-Bund spread is sitting on the uptrend connecting the yearly pivot lows and on the rising 200dma while RSI and MACD are showing bullish divergences. We expect a bounce to at least 2.00% before a resumption of the down trend.
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