Bloomberg News

Ten-Year Bund Yield May Rise to 4-Month High: Technical Analysis

November 29, 2011

Nov. 29 (Bloomberg) -- Germany’s 10-year bond yield may advance towards 2.68 percent, the highest level in four months, after sustaining gains above key technical levels, according to Barclays Capital.

The benchmark yield surpassed 2.30 percent yesterday, breaking above the highs between a so-called double-bottom pattern formed in the last three months, said Dhiren Sarin, chief technical strategist for Asia Pacific at Barclays. The rate slid to 1.64 percent on Sept. 23, the lowest level since at least 1989, when Bloomberg started tracking the data. It then rose to as high as 2.28 percent on Oct. 28, before dropping to 1.67 percent on Nov. 10.

“We are targeting 2.68 percent or so now” for the yield, Singapore-based Sarin said. “It tried it twice, it failed twice, and that’s what constitutes a double bottom, especially when you start to break through the range highs.”

The yield on Germany’s 10-year debt rose four basis points, or 0.04 percentage point to close at 2.3 percent yesterday, when it climbed to as high as 2.34 percent, the most since Aug. 16. The 2.68 percent level was last seen on July 27, when the rate advanced to as much as 2.76 percent.

The rate last week broke above the 100-day moving average and a trendline running from the high of 3.51 percent on April 11, according to Sarin. The moving average was 2.12 percent as of yesterday’s close, while the April 11 level is the yield’s 2011 high.

Germany failed to get bids for 35 percent of the 10-year bonds offered for sale on Nov. 23, sending yields higher on concern the turmoil that began in Greece and snared Ireland, Portugal, Italy and Spain has closed in on France and now risks engulfing the region’s biggest economy.

In technical analysis, investors and analysts study charts of trading patterns to forecast changes in a security, commodity, currency or index.

--Editors: Jonathan Annells, Rocky Swift

To contact the reporter on this story: Kristine Aquino in Singapore at

To contact the editor responsible for this story: Rocky Swift at

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