(a) Fixed Income (technical)Outlook
This short update is for all those bond market gear heads into a more TECHNICAL approach.
The ‘dark arts’, as a friend used to call it.
The following excerpt from the sell side was inboxed TO global Wall St yesterday afternoon. It is representative of main stream thinking (haters gotta continue to HATE at all costs) …
This one firm has been short (and stopped) and is short 10yy, 30yy and looking to this current BID as an opportunity to GET SHORT 5yy at resistance.
… Short-term Strategy: We see resistance at 1.095%, where we would turn tactically bearish, with scope for next support at 1.455% thereafter. Next resistance below 1.095% is seen at 1.04%, below which we would turn neutral …
As far as 10yy and 30yy go and given the current BID:
… a break below 1.46% would likely open up a quick move to the 1.415% low. Whilst not our base case, a break below here would suggest an even longer period of sideways ranging and further delay the basing process.
Short-term Strategy: We maintain our tactically bearish view from resistance at 1.425%, with support now seen at 1.82%, where we would turn tactically neutral. Resistance stays at 1.415%, below which we would also turn tactically neutral.
And a bit further OUT the curve:
… In contrast, a weekly close below 1.76/75% would turn the broader risks to the downside and mark a major range breakdown, however this is not our base case.
Short-term Strategy: We recently turned tactically bearish at resistance at 1.825%, with scope for support at 2.11%, where we would turn tactically neutral. Resistance stays at 1.75%, below which we would also turn tactically neutral.
Interesting attempt at shape-shifting of the dialogue by visualizing the DAILY moves and framing conversation in terms of WEEKLY (ie HOPE for some reversal AFTER NFP, as a STRATEGY?)
Meanwhile, without a terminal I’m relegated TO visuals like this, which suggest 30yy vs 1.81, are at a critical junction …
… Again. But what do I know…