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U.S. 10-Year Note Yield to Attract Investors at 3.14%: Technical Analysis
Treasury 10-year notes may attract investors as their yields rise to 3.14 percent, National Australia Bank Ltd. said, citing trading patterns.
A Fibonacci graph shows the level is a 50 percent retracement of a decline in yield that began at 3.42 percent on June 3 and ended at 2.85 percent July 21. The levels identified by Fibonacci charts help investors to set buy and sell orders.
“That’s a pretty important resistance level,” said Peter Jolly, Sydney-based head of market research for the investment- banking unit of National Australia Bank, the nation’s largest lender. “To break that technical level, we’re going to need to see data that is supportive for the economy.”
Ten-year rates declined one basis point today to 3.04 percent as of 6:50 a.m. in London. They have fluctuated around the 38.2 percent Fibonacci retracement level of 3.07 percent for a month. Yields climbed toward the 50 percent barrier once in July, stopping short at 3.13 percent on July 14.
Colin Embree, head of fixed income trading and sales at Bank of Nova Scotia Asia Ltd. in Singapore, said he’s betting 10-year yields will stay below 3.15 percent. He said he’s considering buying as rates rise.
Fibonacci analysis is based on a formula developed by 13th century Italian mathematician Leonardo da Pisa, known as Fibonacci, who discovered the sequence while studying the reproduction rate of rabbits.
In technical analysis, investors and analysts study charts of trading patterns and prices to forecast changes in a security, commodity, currency or index.
To contact the reporter on this story: Wes Goodman in Singapore at wgoodman@bloomberg.net.
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