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Treasury Technical Indicator Shows ‘Bearish Momentum’

The 200-day moving average for Treasury 10-year yields is leveling out after falling for 18 months, indicating the decline in rates is losing momentum, according to Mirae Asset Global Investments Co.

Ten-year yields held at 2.03 percent as of 7:41 a.m. in London, according to Bloomberg Bond Trader prices. The 200-day average was 1.71 percent, little changed for almost four weeks. Before that, it tumbled from 3.17 percent in August 2011.

“There is bearish momentum in the Treasury market,” said Will Tseng, a fixed-income trader in Taipei at Mirae Asset, which oversees $50 billion. “The long-term moving average has changed from a downward trend to flat. It won’t be a big jump, but it will be a slow upward trend” in yields, he said.

Benchmark 10-year rates have climbed 26 basis points, or 0.26 percentage points, this year. The broad market has handed investors a 1 percent loss in 2013, according to Bank of America Merrill Lynch indexes.

The rate will climb to 2.32 percent by Dec. 31, based on a Bloomberg survey of economists, with the most recent projections given the heaviest weightings. For an investor who buys today, the move would result in a 0.7 percent loss after accounting for interest, according to data compiled by Bloomberg.

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.

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

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