Halister News

(Bloomberg) -- UST 2s10s spread remains vulnerable to further compression even as it stabilizes around the 55-DMA support at 119bps; daily momentum profile argues for a continuation of the tactical curve flattening theme, Bloomberg technical analyst Sejul Gokal writes.

• See live chart; UST 2s10s now -2bps to 118bps
• Next support at 113bps, 38.2% Fibonacci of Aug./Dec. widening and 61.8% of the Trump-induced widening (Nov. 9 low to Dec. 12 high)
  • Below here may overshoot to 107bps (76.4% Fibonacci)
• MACD remains negative and has dropped to lowest since September, reinforcing the tactical flattening bias
• Friday’s bear steepening, sparked by stronger U.S. wage growth data and upward revisions in Nov. NFP, has done little to alter the short-term flattening momentum with most widening contained inside Thursday’s range
• A spread expansion above 129bps (Jan. 3 high) would restore the short-term curve steepening pressure, in-line with the core/broader outlook which favors bear steepening

• NOTE: Sejul Gokal is a technical strategist who writes for Bloomberg. The observations he makes are his own and are not intended as investment advice