RESEARCH CONTENT
Slides that look at current levels and sentiment of various bond markets. The charts highlight how some government bonds are leading the rallying pack (USTs, CAGBs), some have momentum increasing, others stalling, whilst a couple are the clear laggards (Bunds and Gilts). The net result is a difference in trends of cross market spreads to the UST, with a resulting difference in FX price momentum moves vs the USD. These last points are potentially very important given the risk of breakouts from long-term trading ranges of some currency pairs (whose weekly Bolllinger Bands are extremely tight).
The slides also highlight the growing bearish momentum in the NASDAQ and SOX, whose trend reversal patterns (first highlighted in July’s slides) are signalling a change in sentiment from dip buying to selling on strength. More concerning for equity bulls is that there are now similar developing signals across other global markets.
The final slide is also important for inflation breakevens, which have already performed well. The charts depict how oil is now sitting on a very important multi-year support – however this time the market has reached this point with more bearish momentum compared to previous instances.
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