Early August rally for bond yields?

The US 10 Year Yield has bounced but needs to breach 2.026 to confirm a recovery, says Chris Williams, Senior Broker at Newedge.

Williams points out that the RSI is at its lowest level since 2011 and, moreover, he thinks it significant that the for the last two months in a row the first week of each month has resulted in a bond drop. Williams thinks that supply might be the surprise catalyst – “The US is where the real trade is as it has the supply-Fed factor”.

Likewise, he believes the UK Treasury Gilt 2060 is due to fall (yields increase), primarily because it has developed a tendency to fail against the 200-day moving average line and because it seems to be forming a top against a 61.8 retracement level (see main image).

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