Treasury Yield May Fall From 200-Day Average

Treasury 10-year yields failed to hold above a technical barrier, indicating they may decline, according to Scotiabank, citing trading patterns.

Yields were as high as 1.89 percent on Sept. 14, rising through the 200-day moving average of 1.83 percent. The rate dropped below the bar yesterday, a sign yields will have trouble sustaining increases, said Ali Jalai, who trades U.S. debt in Singapore at Scotiabank, a unit of Bank of Nova Scotia (BNS), one of the 21 primary dealers that underwrite the U.S. debt.

“Ten-year yields should fall from here,” Jalai said. The rate may drop 10 basis points, or 0.10 percentage point, by the end of next week, he said.

U.S. 10-year rates increased two basis points today to 1.82 percent as of 7:24 a.m. in London, Bloomberg Bond Trader data show. The price of the 1.625 percent note due August 2022 slid 1/8, or $1.25 per $1,000 face amount, to 98 6/32.

Bonds fell today after the Bank of Japan (8301) increased the amount of money it plans to pump into the economy, driving gains in Asian stocks and sending Treasuries lower as money managers sought higher-yielding assets.

Some investors and analysts who study charts of trading patterns use the averages to identify levels where orders to buy or sell may be set.

To contact the reporter on this story: Wes Goodman in Singapore at wgoodman@bloomberg.net

To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net

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