HALISTER1: UST MORNING CALL: Profit-Taking Is ‘Biggest Risk to the Rally’

UST MORNING CALL: Profit-Taking Is ‘Biggest Risk to the Rally’

(Bloomberg) -- “We like the market, the technicals remain in bullish mode, we do have month-end next week and putting that all together we deem the biggest risk to the rally to be profit-taking ahead of the long weekend,” CRT strategist David Ader says in note.
  • Other observations from strategist morning notes:
  • FTN (Jim Vogel): “With volumes low yesterday and this morning, it’s hard to see much in this week’s trading other than a pause in risk appetite that allows bonds to wait for more economic data”
  • Marty Mitchell (independent): “To the extent that the dollar can continue to firm up and that crude continues to weaken, then the overbought correction in U.S. equities and the oversold bounce in Treasuries will also begin”
    • “The supposed shift at the Fed seems real, putting markets on notice that they shouldn’t get too complacent in expecting a delay in the next rate hike until later in the year,” so USD “bounce shouldn’t be discounted”
  • RBS (John Briggs): “Medium- to longer-term portfolios should be looking to establish or add to TIPS positions, especially if you have more faith in the economy than not, and believe oil will be more stable going forward than not”
  • Seaport Global (Tom di Galoma): “Look for Treasuries to remain well bid ahead of the long weekend, however as 10yr notes push towards 1.82/80% look for some duration reduction ahead of next week’s Treasury supply”
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)
Tom Di Galoma (Seaport Group LLC/The)

Topics
UST Morning Call

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