Strategic Technical Themes 11 September 2013

US 2-10Y Swap Curve – Daily Chart

Widens back to its August 2.525 high but is likely to struggle below the 2.59 June 2011 peak

During August the US 2-10Y swap curve widened to the minor psychological 2.50 level and reached a high of 2.525 before narrowing slightly. This high is now back within grasping distance.

Above 2.52 lurks the 2.55 March 2011 low and the 2.59 June 2011 high, both of which should be reached before the end of the year but are likely to cap in the days ahead.
Further up the 2010 and 2011 peaks can be seen at 2.73 and also at 2.81.
We will retain our long term widening bias while the swap curve remains above the 2.155 late June low.
Over the next few weeks some renewed narrowing back towards the 55 day moving average at 2.33 is likely to be seen.
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