Bond Technical Strategy – Weekly by Lloyds TSB

The extension of the equity rally and the continued appreciation of commodities is setting up some interesting opportunities over coming weeks.

The extension of the equity rally and the continued appreciation of commodities is setting up some interesting opportunities over coming weeks. The commodity rally, which started many months ago, has begun to accelerate and broaden. However, whilst this continues to be an impressive rally that has reversed an oversold situation, we are
now approaching the reverse condition. Whilst the market continues to focus on the positive news flow, bonds have remained range bound, albeit at the lower end of this range.

I am a long term dollar and bond bear (and commodity bull) so the current moves are in line with this strategy. However, whether we have seen the ultimate low in equities still remains in doubt and a corrective phase for gold looks likely. So whilst bonds may be
forced lower by the above factors over the coming weeks, the outlook continues to be cautiously positive.

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