10yr US bond yields are likely to reach new lows, say David Sneddon and his team at Credit Suisse in London.

Following a period of consolidation in April, US 10yr bond yields have broken lower and completed another bullish (for bonds) continuation pattern (see Chart). This reinforces Sneddon’s view that yields will move back towards 0.38% and eventually beyond. The next resistance levels after 0.38% are seen at 0.30/0.29% and then at 0.135/0.13%, which is the lowest that Sneddon can see US 10yr yields falling to.

Sneddon says a move above near-term support at 0.79% would negate the above view and confirm a prolonged corrective phase, with next support at 0.99/1.00%, which he would expect to cap the market if reached.

See Chart.