Halister News

(Bloomberg) -- “Momentum studies on the long-end of the curve are overbought now but not quite at overbought extremes that would suggest that a downside correction is at hand just yet,” independent strategist Marty Mitchell says in note.

• “It is not advisable to chase the bond market higher in here,” and “patience for a corrective pullback is warranted before adding to long exposures”
• Other observations from strategist morning notes:
• BMO (Aaron Kohli): “2yr yield momentum indicators are signaling overbought extremes as this part of the curve consolidates in a narrow range between 72 bp and 77bp”
  • “We are watching for momentum to turn bearish and target a very near-term move to 80bp, where the 50-day moving average will serve as the next key resistance level”
• CRT (David Ader): Next week’s UST supply will offer “the largest net paydown for any trio of auctions since April 2010 -– food for thought if not a reason to get long Treasuries”
• FTN (Jim Vogel): “Higher inflation expectations have concentrated over the next three years on a much smaller negative pull from oil seeping through inflation math starting later this year or early 2017”
  • “If investors do start a monetary policy inflation trade, then TIPS have more room to run”