Forex Flash: Range trade 10-year US treasuries look to continue – RBS

The market continues to see a 1.70% to 2.13% range in 10-year US Treasuries. According to the RBS Research Team, “The key support remains 2.13% for 10y-years while the near-term resistance is 1.80%, a break through here should see extension to 1.70%. In addition, momentum measures are mixed – suggesting that the range trade will continue.”

Treasuries have built on yesterday's gains as global stocks have declined modestly and after Italy had a disappointing sale in BTP's this morning. Italy's 10-years have cheapened 10bp to Bunds with Germany seeing solid demand for their 2-year auction. The market had a bid right out of the gates in Asia, buying 10-years, while central bank buying was seen in MBS and 3-years. At the crossover we saw say some central bank selling in 2's and little after that. The total Treasury inter-dealer broker volume was 89% of the 10-day average through as of this morning.