Article / 21 March 2018 at 14:09 GMT

Bond markets looking vulnerable again after pause

Technical Analyst / FuturesTechs
United Kingdom
  • Bond markets have taken a bit of a breather in recent weeks
  • Tonight's FOMC tonight and the BoE tomorrow may liven things up
  • What do the charts say going into these key events?

 The Federal Reserve is expected to announce an interest rate hike tonight. Pic: Shutterstock

By Clive Lambert

T-Notes gave a big sell signal back in January and subsequently sold off to 119.15 by mid-February. Since then the high has been 120.23 on two occasions, the latest failure coming last week to suggest the bulls were really struggling to convince. Sure enough we've set a weaker tone since and we broke a short-term uptrend line on the daily chart overnight. So we'll see if the Fed sets a tone that pushes the market back to/below 119.15 to target 118.175 next, then into the 116s (not all today though!).

Chart 1: T-Note futures – daily

T-Notes Daily
In the UK, Gilt futures have had a tough few days after posting several reversal candles either side of the weekend, and all appearing at former resistance. Below 120.53 we can look for a fresh assault on the February low at 119.13.

Chart 2: Gilt futures – daily
Gilt Futures Daily

Bund futures have also posted a few reversal candles of late to warn that we might be about to turn over, especially as these have appeared on the retest of the 200-day simple moving average. If/when 157.67 breaks look for a test of channel support, which is at 157.10 today, moving higher by around 10 ticks a day. Below here we can look for 156.22 then back to the February low at 154.60.

Chart 3: Bund futures – daily
Bund Daily
So the charts are suggesting "returning weakness" is the theme. Let's see how markets respond to the central bankers over the coming days...

– Edited by Clare MacCarthy


Clive Lambert is chief technical analyst at FuturesTechs 


The Saxo Bank Group entities each provide execution-only service and access to permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on or as a result of the use of the Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail