Comment: Benchmark ten-year Gilts, Bunds, Canadian and US TNotes all yielding an eye-popping 2.00% while more dubious sovereign issuers see theirs swing wildly between 5.00% and 13.00% (Greece today allegedly 33.5%). We feel there is still more to go for as yield curves flatten and credit spreads widen. Short Sterling futures continue to consolidate under record highs, as has been the case for front month ones for over two years, red contracts for four months or more. This front March contract has mixed technicals at best, struggling with the daily Ichimoku ‘cloud’ yet moving averages are bullish. Sideways to lower we still think, but warn that downside momentum has waned considerably.
Strategy: Sell at 98.910/98.940; stop above 99.000. First target 98.750, possibly 98.600.
