Strategic Technical Themes 25 September 2013

US 2-10Y Swap Curve – Daily Chart

Short term narrowing should end in the 2.34/2.21 region and be followed by renewed widening

The US 2-10Y swap curve is once again narrowing and is now trading back below the 55 day moving average at 2.37.
Between it and the 2.34 late August low the swap curve is expected to stabilise. From there renewed widening should then be seen.

Above the 2.52 August high lurks the 2.55 March 2011 low and the 2.59 June 2011 high, both of which should be reached before the end of the year.

Further up the 2010 and 2011 peaks can be seen at 2.73 and also at 2.81.

We will retain our long term widening bias while the swap curve remains above the 2.155 late June low.
Support below the 2.34 level but above the 2.155 late June low can be seen around the 2.275 August low and at the next lower 2.21 late July low.
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