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Forex Flash: 10-year US treasuries point to lower near-term outlook – RBS

FXstreet.com (Barcelona) - The market continues to see a 1.70-2.13% range in 10-year US Treasuries. According to the RBS Research Team, “Key resistance remains at 2.15% in 10-years, while near term resistance is 1.80%; a break through here should see extension to 1.70%. Momentum measures are looking better for bonds with short-term work now bullish and intermediate term studies (weeklies) are oversold and trying to turn bullishly as well – our bias remains to lower yields near-term.”

Indeed, treasuries have rebounded after two days of relatively heavy losses and despite a drag from Gilts after mildly hawkish MPC Minutes. Markets will likely sit tight until the Fed releases its policy statements at 2:00PM EST with the Chairman's press conference starting just after at 2:30pm. Total Treasury inter-dealer broker volume was 81% of the 10-day average through this morning.

Forex Flash: BoE follows Fed pattern – UBS

With the (likely) introduction of 'forward guidance' and 'intermediate thresholds' to anchor policy as much as possible, the stage is set for low rates and/or QE to remain in place until unemployment and inflation reach levels consistent with 'escape velocity' in the UK. According to UBS Research Analyst Geoffrey Yu, “ In essence, the BoE is choosing to do a 'Fed' rather than a 'BoJ'. For sterling, although the immediate risk of policy-driven debasement has been alleviated, we would sell sterling into the post-budget rally as the broader direction for the BoE is towards more flexibility, and in Chancellor Osborne's own words, more 'monetary activism'.”
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Forex: GBP/USD holding steady around 1.5130/35

After climbing to the area of 1.5185 post-BoE minutes, the sterling initiated a correction lower to the current levels around 1.5130/35, ahead of the FOMC minutes due later...
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