Bonds selloff is finally over? - #bondsAfter hitting 2.25% on the yields during the FOMC meeting, the bond market has found a bottom and is reversing. We are likely to see the bond market continue to climb higher and retest resistance. Levels tot he upside can be found at the 126 handle, while support can be found at the daily low of 124.010. How the bond market interprets the FOMC event after the release is going to be critical as the markets digest the 25 bip rate hike from the FED and access all the additional risk in this current market environment.
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USB10YUSD trade ideas
treasury market looking to clear 2.25% on the 10 year - $bondThe treasury market has been trending downwards this week in anticipation of the big FOMC event. Its important to note that the bond market erased all of the war risk and made a new low, settling in at 2.17% on the 10 year yields just ahead of the FOMC. With the trajectory that this market is going, we believe that 2.25% in the 10 year is within sight. Furthermore, the FOMC would be the catalyst that could quickly take bond market to that level this afternoon.
Bond market will see more bids coming in - #bondsWe were wrong on our call yesterday as we predicted the bond market will continue to go higher. We still stand by our call for higher moves in the bond market although on the daily, it pulled back more than we had anticipated. As of now, the bond market is finding support at a key area in the 127.10 zone. There is also a trendline support here as well which suggest to use that this area will be difficult to crack. We will be looking for buying to come in around this zone with target to the upside at 127.75 or the 128 handle.
Bonds catching bids - #bondsUS 10 year treasury note has pulled back in yesterdays trading action which is the perfect scenario we were looking for to buy the dip as a support level is now developed and new participants begin to enter the bond market. Currently the price is sitting at 127.60 but will likely get bid up again. We have a strong value area for bonds to the upside at the 128.25-128.50 range. After that we will be looking for the 129 handle and 129.30 level for daily resistance.
Bonds to find support at the 100 day MA - #bonds $bondsThe bond market has pulled back into the moving average support after breaking the 129 handle. This is normal for a healthy market that is catching bids on risk aversion trade. We view these dips as areas to accumulate during these times and will be buying here into the resistance target at 129 handle or 129.60 area.
Bonds catch bid on nuclear power plant attack - #bondsAs we mentioned earlier this week, the bond market is quite bullish and looking for an upside move as yields drop further. The news overnight about the attack only helps to cement the fact that the risk to the markets is still elevated. We remain firm on our target in the bond market for levels at 129 and 129.75 as areas of resistance for further upside moves in the bond market.
Watch for bids to come in the 10 year treasury - #bondsAs we mentioned yesterday, there was a good chance that the bond market would likely pull back to the 127.70 level. We undershot that level by a few points but have now settle back into the support. With the current environment looking uncertain, we feel that bonds will likely continue to trend higher and therefore upside resistance at 129 and 129.7 continues to be our target area.
Bond yields continue to drop further - #bondsAs the price in the treasury market continues to climb higher, the yields are falling further. We are looking 1.68% or 1.6% to be retested in the coming days in the bond market. With that being said, resistance for those yield targets in the bond prices can be found at 129.25 or the 130 handle. Its important to note that the implied odds for rate hikes have dropped dramatically since last week due to war risk and geopolitical uncertainty.
Suspicious bid in bonds, what does smart money know - #bondsThe bond market made a suspicious move higher in the overnight trading session on low liquidity and no news driven event. Moves like this in the treasury market is a tell tale sign that smart money is repositioning itself for a policy shift or in anticipation of a big event change coming up. The down trendline that was establish back in December to February has been broken and the next clear resistance for bonds is at 129.65. However, since the market has moved up quite a bit already, we would be surprise if it pulls back to test 127.75 before making that next leg up.
Bond market is ignoring inflation and focus on the war - #bondsBefore the war tensions kicked off about 2 weeks ago, the market story for bonds was that inflation is high and the FED need to raise rates. This help push yields over the 2% mark and the price of bonds to 126 handle. But since then, the bond market has pretty much ignore the rate hike narratives and started to move higher on risk. As of now, things could go either way as a high level meeting between Russia and Ukraine is expected to take place today. Upside evels to watch out for in the bond market would be at 127.70 or 128.60 while downside levels can be found at 126.53 or 126 handle.
Bond market retesting lows from last week - #bondsThe bond market has been struggling to rally on risk off bids and any highs in the bond price is an opportunity for bond traders to short the price back down in expectation of higher inflation and rate hikes coming in March. We can see on the chart the amount of sell pressure anytime the price gets bid up is extortionary. With that being said, we feel that with the current environment being as is, the lows set from last week should hold. Therefore we are anticipating some sideways ranging action in the bond market for now with the support at 126 handle expecting to hold. If the market bounces from that level, we will be eyeing resistance around 126.55, 127.05 or 127.75 area.
Bond market getting bids due to war risk - #bondsBond market is acting as a safe haven asset and seeing an influx of money bidding it up on war risk. However, as any bond trader would be able to point out, the rally in the 10 year treasury isnt moving up as much. Almost suspiciously, the magnitude in bonds has been quite subdued for an event this big to take place. With that being said, buying bonds during times of crisis would be the trade to go with. Therefore we are looking for more upside levels for the bond market at 127.75, or even 131.68 if things really get out of hand. It is still to early to predict how much more we could go on these war trades.
Bond Market is Confirming a Risk on Bid in Stocks - #bondsThe bond market is giving us the confirmation we needed for a relief rally in the equities market as geopolitical tension subside for now. We are currently trending lower towards the 126 handle which was the lowest low set during the last downturn. If the market sentiment holds up, we could be testing the 126 level today. If not, watch out for the bond market to catch a bid back up.
Bonds are rallying on the risk trade - #bonds #safehaven War tension has cause market participants to seek safe havens and we are seeing that play out in the bond market. This is interesting to note because 2 weeks ago the bond market was selling off on fears of expected rate hikes, which has now taken to the sideline on the war trade. It is extremely difficult to pin point where or when the market will reach certain levels as the price action is being driven by news. With that being said, intraday levels serves as good benchmark until a headline blows it out of the water, so heed the word of caution. For upside targets, watch for resistance at 127.75 or 129. 65. For downside support, look for 126.55 or 126.03.
Bond Market In A Sell the Rally MomentWe note that the bond market has been marching towards the 2.15% on the yields, however, there has been news as of late pushing bond prices higher. We believe that these short terms pops in the market will offer opportunity for traders to sell the rally as the over market is still pricing in rate hikes for the next FED meeting. For levels to consider adding a short position, look for 127 handle or 127.05 as areas of interest to short.
Bond market catches bids - #tnote #bondsBond market caught a bid in the overnight session as the potential breakout of war is ever increasing. Its interesting to note that the bond market is caught between to narratives are the moment; on one hand, bond acts as a safe haven product, rallying on any risk of geopolitical tension, while on the other hand, the bond market is selling off due to higher yields, inflation and rate hike expectation. It will be difficult to save in the short term where this market wants to head towards so we must take note of key levels on the charts to help us establish price action in the bond market. On the side, we have targets at, 126.53, 127.05 and 127.34 while on the downside we got that critical 2.15% on the yields which should bring the price to approx. 125.25.
Bond market selloff is accelerating - 2.15% coming soonThe 10 year treasury note has been on a downward spiral since the FED affirm the market the rate hikes are coming in March. But in the last few trading session, the pace at which the bond market prices in rate hikes has been picking up fast as noted on the slope of the down trendline. Next target for the 10 year notes is at 2.15% on the yields, which will take the price of bonds to about approx. 125.30.
Whats is the next target for treasury market?After hitting the 2% mark on the 10 year treasury yields, bonds market momentum has wand in for now. Currently we are oscillating between the 126 handle and 127.05 handle. As of now, the market is looking for directional bias, which could come from FED news or Russia/Ukraine tension escalation or de-escalation.
10 year treasury note trading at 2%The 10 year notes have finally touch and traded over the 2% handle on the yields as inflation prints a 40 year high. With the strong momentum touching the 2% mark, and settling around there, we feel that how the bond market closes today will be a big sign of sentiment. With that being said, the march towards 2% has been a one way direction and we feel that it is due for a slight pull back. Watch out for 126.55 and the 127 POC zone as targets to the upside. While the market is on a strong downtrend, it would be wise to accumulate short positions on any rallies and so if the market does catch a bid, those resistance levels would serve as better short entry prices rather than going long into them. If we are wrong and the market continues to march lower, watch out for 125.90 and 125.30 to the downside.
Further downside for the bond marketWe are getting closer and closer to the 2% mark on the 10 year treasury yield. If there is any report that will give us that momentum needed, its the CPI report from today. Further weakness should take us to 126.50. If there is enough momentum we could even squeeze lower, so be mindfully of additional levels to the downside which we would have to go beyond the times of the covid crisis to find.
Sell the rallies in the bond market #bonds10 year treasury notes has pulled back slightly after the yields touched 1.96%. As of now, we are still in a bear market for bonds with a clear target for 2% yield and so we will continue to sell rallies when we get the chance in the bond market and look for target levels around the 2% price mark on the 10 year, which should take us to about 126.55. It important to note that this 2% level is acting as a psychology barrier and could see a massive break, taking us much lower in the bond prices or higher than 2% yield!
2% yield on the 10 year treasury note is a givenThe market has been pushing for 2% on the 10 year treasury note as rates are expected to rise. As of today, we were able to reach 1.96% on the treasury note before letting off the gas pedal. Its a wide consensus in the bond market that 2% is key, and thus we should stick to our target, which is only a few more ticks away. A break of the most recent low should give us the moment to get to 2%. The real question here is if there will be enough momentum to blast through that key barrier or will we reject 2% and fall off again.
