BofA Merrill Lynch:
Yesterday's S&P500 weakness helped 10yr Treasury yields complete their three-week Head-and-Shoulders Top, with the close below the formation's neckline at 2.171%. With the S&P500 vulnerable to further corrective downside toward the 100d average at 2078 and potentially below, we remain bullish 10s, targeting the year-to-date channel base at 1.938% and potentially below.
Bund yields are also in the process of topping, following yesterday's close below the 200d MA at 57.9bps. A close below the May-08 low at 51.9bps confirms the top, exposing the series of Q1 pivots at 37.9bps and 25.6bps.
