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12 Jul 2013
Flash: US rates in deeply oversold territory – RBS
FXstreet.com (New York) - There are widespread signs that investors are now defensively positioned for higher rates, notes the RBS Research Team.
Moreover, “medium-term momentum signals are deeply oversold for US rates. We recommend covering shorts, longing 2-year notes and being ready to extend durations when longer-term momentum signals finally confirm that the bear trend in place since early May has ended.” the team adds.
Treasuries rallied overnight with the 7-year point on the curve outperforming. Our overnight flows were very light – we saw some buying in 10-years and selling in the long end by fast money. Overnight inter-dealer Treasury volume was 84% of the 10-day average through this morning.
Moreover, “medium-term momentum signals are deeply oversold for US rates. We recommend covering shorts, longing 2-year notes and being ready to extend durations when longer-term momentum signals finally confirm that the bear trend in place since early May has ended.” the team adds.
Treasuries rallied overnight with the 7-year point on the curve outperforming. Our overnight flows were very light – we saw some buying in 10-years and selling in the long end by fast money. Overnight inter-dealer Treasury volume was 84% of the 10-day average through this morning.