 Hello, welcome to this week's CMC markets bond snapshot. Now the reason we're looking at bonds is there's been a lot of volatility in that market We've seen prices crashing we've seen yield spiking And so we want to assess exactly why this is happening and have a look at the charts and see how far this can go Now what we're going to do shortly is have a look at three different charts Just because this is happening across multiple government bond markets, so it's not specific to one country It's really global central bank policy that's driving this now as you know as we've spoken about lots of times The European Central Bank has just began its quantitative easing program started a few months ago at the beginning of this year Now bond markets moved higher particularly the German bond the benchmark bond in Germany in Anticipation of the European Central Bank doing the buying so they were front-running that those purchases the idea of the Central Bank's program was to prevent deflation and to encourage inflation Towards the central bank's two percent target. We had data last week this week Even that shows that inflation in the eurozone is now point nine percent their target is two percent so we're getting closer and closer to their target and Number one it may mean that the program doesn't need to go its full length, but number two It just shows inflation is coming back so inflation expectations are changing Meaning that people will eventually eventually believe there's gonna need to be higher interest rates to combat the inflation And so bond yields are rising to much those rising interest rates and bond prices are coming down So people are selling bonds is the net effect of this We've had a bit of a respite over the last couple of weeks in anticipation of this European Central Bank meeting that we had on Wednesday There was no real Result from that other than the there's the central bank president Mario Draghi saying that we can only expect Further volatility to happen in these markets when there's low interest rates. So that's what we're getting we're getting some volatility right now Now we have to think about the fundamental picture here. We've still got Central Bank easing supporting markets But still we had to look at the charts and see if there's anything that's changed and and to my mind there have been a few Significant technical changes namely breaks of trend lines movements below the 200-day moving average Alongside breaking of numerous sort of support patterns Suggesting that there has been a changing dynamic We may not immediately move into a massive downtrend long-term in bond prices Calling I'm not calling a top in the bond market here But there have been a few technical shifts to suggest at least maybe we're moving into a sideways pattern that could eventually leave to to a downtrend Okay, the first of our three charts is the euro bond cash chart for the one-day candle sticks Now we can see there is this rising rising trend line here. That's been decisively broken Now the next obstacle was the 200-day moving average and you can see that that's kind of where we consolidated Above 153 for a few weeks. But as of this week, we've broken down through what now looks like a Bear flag pattern and if this bear flag pattern were to bear out its full objective We'd be looking down towards a hundred and forty five in a bundle which would be a massive correction Really undoing a large amount of the gains that we've seen in the past year Next up. We've got UK Guilts now. You can see there's a similar trend line that's been broken here This is no coincidence. These bond markets have been moving fairly in tandem the the bund did accelerate more than the guilt and more than the US treasuries which we're about to have a look at you can see there's still some similar technical factors now Equally the guilt consolidated around its 200-day moving average and we do have what looks again a bit like a bear Bear break out here and this this bear flag objection Objective sorry could be just above 110 perhaps from between 110 and 11 Now this chart looks slightly different. This is the US 10-year note and this is because the the US has already Started and finished its quantitative easing program now This market is moving in sync with European bonds But there is still a kind of longer term rising trend line that we should be aware of here Which could come in and a support prices around the 125 area But nonetheless, you can see there's a shorter term flatter rising trend line which we broke quite decisively through this week That's had a sort of neckline around 127 which could point to prices down in the 124 region and below that rising trend line That's it for this week's TMC markets bond snapshot now We need to keep an eye on inflation expectations and how central banks may intervene, but it does seem to have been a change in trend here Keep in mind. We've got tomorrow. We've got the non-farm payroll webinar that begins at around 1 15 p.m British Standard Time and you can follow the link here