UST MORNING CALL: Signals in 5Y and 10Y ‘Are of Modest Value’
(Bloomberg) -- “Treasury trading volume has been so light this week that signals in 5s and 10s are of modest value,” FTN strategist Jim Vogel says in note.
- “Volume charts haven’t begun to fill the gaps between 1.875%-1.920%, hyping volatility until sufficient selling matches the bearish sentiment that has colored this month as risk assets try to erase the first half of February”
- Other observations from strategist morning notes:
- BMO (Aaron Kohli): “Markets have largely priced in an expectation of deposit cuts, and any real market move is likely to focus on the extent of QE and how strongly Draghi hints of additional accommodation through nongovernment asset purchases”
- CRT (David Ader): “Our bearish lean is clearly less technical –- technicals actually support lower rates –- and is more about the seasonal traditions, our expectation that EGBs have overbought the ECB, and an eye to those base effects on incoming CPI and the recent gains in oil”
- Marty Mitchell (independent): “Respect the local range boundaries on the 10yr between 1.90%/1.91% and 1.805%” as “a move outside of either side of this range will be a noteworthy development”
Alert:
HALISTER1Source: BFW (Bloomberg First Word)
People Aaron Kohli (Bank of Montreal)
David Ader (CRT Capital Group LLC)
Jim Vogel (Ftn Financial)
Marty Mitchell (The Mitchell Market Report LLC)
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