US 10yr/3m at lowest level since global financial crisis
Asian equity markets are largely trading with losses overnight as the US-Sino trade tensions heat up again. Beijing yesterday announced it is gearing up to use its dominance of rare earths as a countermeasure in the trade spat with Washington, while the US Treasury Department refrained from labelling China a currency manipulator in its semi-annual foreign-exchange report.
Long term view: markets concluded that the ECB missed out on this cycle. Regarding the Fed policy, markets are now largely discounting a Fed rate cut by December. The US 10-yr yield fell below the cycle low (2.34%) and successfully tested the 50%-retracement (2.28%). A confirmed break would bring the 62%-retracement level (2.06%) on the radar.
Short positions below 2870.00 with targets at 2785.00 & 2720.00 in extension
Long above 2870.00 look for further upside with 2916.00 & 2954.00 as targets
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