HALISTER1: UST MORNING CALL: ‘A Period of Seasonal Strength’ Is Ahead

UST MORNING CALL: ‘A Period of Seasonal Strength’ Is Ahead

(Bloomberg) -- “We are exiting a period of seasonal weakness for bonds and are heading into what is typically a period of seasonal strength during April,” independent strategist Marty Mitchell says in note.
  • “Longer-term momentum indicators in the bond market are oversold and in need to correcting back to neutral and to overbought,” which “argues for lower yields in the next few weeks”
  • “Attractive valuations vs overseas debt markets” should “also be supportive of a bond market rally”
  • Other observations from strategist morning notes:
  • CRT (David Ader): “With our bullish bias still intact and the data calendar limited to mortgage apps and new home sales on Wednesday, we remain cautious of the potential for the influence of corporate deal pricings to provide upward pressure on the market –- either from hedging or simply making room for the new supply”
  • FTN (Jim Vogel): “In a thin market, just the quick liquidation in futures on Evans’s benign remarks was enough to further weaken technicals,” and “resistance to last week’s rally was so strong at 1.85% it will take a series of events to get to the low 1.80s”
  • RBS (John Briggs): “Fed is buying time, not only to watch the data, but in the way of financial conditions and the market itself. Knowing they would not hike in March, and it was unlikely in April, the best way to keep stocks up and the dollar down was to be dovish for now”
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
David Ader (CRT Capital Group LLC)
Jim Vogel (Ftn Financial)
John Briggs (RBS Securities Inc)
Marty Mitchell (The Mitchell Market Report LLC)

Topics
UST Morning Call

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