Treasury rates to move higher in 2015

There is no compelling reason for yields to move immediately higher.

There were a lot of reports and surveys over the last week indicating consensus view that treasury rates are scheduled to move higher in 2015. Laggards have taken positions in the last few sessions and shorts are held in weaker hands. The inability to move lower in Treasuries and Eurodollar futures in the past two sessions signals a likely pause in emerging bearish market conditions. Therefore further modest gains in Treasuries and Eurodollar futures are likely.

EDH7 should be expected to find resistance toward 98.00 (last at 97.925) and TYH5 could move closer to 127-00. We shall watch and expect that the Eurodollar futures yield curve shall mark a more parallel shift than a flattening in any continued advancing prices. This will support the notion that this advance is weak and the bearish trend shall soon resume.
About the Author

Martin McGuire, managing director at TJM Institutional Services