Bunds Advance Still Looks Robust

While many appear sceptical sub 3% Bund yields can be sustained looking at the Bund chart (generic RX1) the outlook is pretty robust with solid support now in place at 124.70/74 which should provide a platform to mount a march on towards the 50% Fib line at 127.32 and from there on towards 129.00+. Bulls should take further encouragement from the longer-term moving averages too with the mkt edging past the 200-day and the 55 crossing above the 100-day. Using weakness to accumulate looks sensible. Given ECB's policy bias curve trades should also work well, a bullish bias to the 2/10's currently around 142bps (based on generics). Historically this trade works well during tightening cycles.