All eyes are on U.S. Treasury Bonds – Market Overview

All eyes are on U.S. Treasury Bonds – Market Overview

Yesterday, yields of U.S. Treasury Bonds hit new highs, with the 10-year benchmark surpassing the 1.60% mark. Today's session saw it fall to 1.53%.

In this sense, it will be crucial to follow the auctions that will take place today with a 3-year bond auction and especially tomorrow with a 10-year bond auction.

Suppose the demand for these auctions is not high enough to push down the yields, and they continue on this trend. In that case, the market could return to the dynamics experienced yesterday with downward pressure on stock indices and a strengthening of the U.S. Dollar.

Meanwhile, the markets experienced corrections from yesterday's movements.

The U.S. Dollar strengthened, and its price against the euro exceeded the 1.1900 zone after having touched a minimum of 1.1830 yesterday.

From a technical analysis perspective, EUR/USD broke lower after trading below the 100-day SMA line, currently located at 1.2030, but rebounded. The daily RSI reached the 30 zone, a level that had not been seen since March 2020. The rebound also comes from a wide price concentration zone between 1.1750 and 1.1870.

Therefore, it could perhaps be considered a purely technical correction without the fundamental data has changed substantially. There are fundamental causes that might generate pressure on the euro, such as the ultra-expansive monetary policy of the European Central Bank, which not only remains in place but could grow stronger if the outflows of European bonds that we have witnessed in previous days should intensify. Additionally, there have been talks in the market about the ECB increasing the pace of asset purchases, which has not been officially confirmed.

On the other hand, today, the fourth quarter's GDP data for the Euro Area was published, showing a year-on-year fall of 4.9%, somewhat better than the expected -5% figure.

Together with other fundamental factors, this data contributed to a rise in European Stock Indices, which perform better than the North American ones, breaking the correlation that they have traditionally experienced in recent months.

The fact that inflationary expectations in Europe are not as high as those in the United States and that the levels of European bonds yields have not experienced such high increases, together with expectations of a recovery in the economy due to the administration of vaccines and implementation of the Next Generation aid package are the main reasons for this behaviour.

Elsewhere in Germany, DAX has reached a new all-time high in the 14452 zone and technically does not find any benchmarks that can be considered resistance with RSI levels relatively below overbought levels.

Sources: ForexLive.com, Investing.com.

Maklumat/penyelidikan ini disediakan oleh Miguel Ruiz (“tpenganalisis penyelidikan”) dan tidak mengambil kira objektif pelaburan tertentu, keadaan kewangan atau keperluan khusus individu. Penganalisis penyelidikan bertanggungjawab terhadap kandungan laporan penyelidikan ini, samada sebahagian atau keseluruhannya, memperakui bahawa pandangan mengenai syarikat dan sekuriti mereka yang dinyatakan dalam laporan ini jelas mencerminkan pandangan peribadi dan pedagang bertanggungjawab sepenuhnya ke atas risiko mereka sendiri.

Penyelidikan yang disediakan bukanlah pandangan JME Financial Services (Pty) Ltd ataupun undangan untuk melabur dengan JME Financial Services (Pty) Ltd. Penganalisis penyelidikan juga memperakui bahawa tiada sebahagian daripada pampasannya, adalah, atau akan, secara langsung atau tidak langsung, berkaitan dengan cadangan atau pandangan tertentu yang dinyatakan dalam laporan ini.

Sehingga tarikh laporan diterbitkan, penganalisis penyelidikan dan pasangannya dan/atau saudara-mara yang bergantung kepada penganalisis penyelidikan, tidak memegang kepentingan dalam sekuriti yang dicadangkan dalam laporan ini (“kepentingan” termasuk pemilikan langsung atau tidak langsung terhadap sekuriti).

Penganalisis penyelidikan tersebut bukanlah di bawah JME Financial Services (Pty) Ltd. Anda digalakkan mendapatkan nasihat daripada penasihat kewangan bebas mengenai kesesuaian pelaburan, di bawah penglibatan berasingan, seperti yang anda anggap sesuai dengan objektif pelaburan tertentu anda, keadaan kewangan atau keperluan kewangan tertentu sebelum membuat komitmen untuk melabur.

Undang-undang Republik Afrika Selatan akan mengawal sebarang tuntutan yang berkaitan dengan atau yang timbul daripada kandungan maklumat/ penyelidikan yang disediakan.

JME Financial Services (Pty) Ltd, beroperasi sebagai ZA.CAPEX.COM, bertindak sebagai perantara antara pelabur dan Magnasale Trading Ltd, rakan kontrak untuk perbezaan yang dibeli oleh pelabur melalui ZA.CAPEX.COM, yang diberi kuasa dan dikawal selia oleh Cyprus Securities. dan Suruhanjaya Pertukaran dengan nombor lesen 264/15. Magnasale Trading Ltd adalah prinsip utama CFD yang dibeli oleh pelabur.