Overnight comments from CitiFX on US yields and the Swiss franc
CitiFX technical analysts have "an increasing bias for higher US yields into what we think will be a September lift-off by the Fed"
- Say that two-year yields "have been making higher lows since the start of the year" but not yet higher highs
- Looking for a move above yield resistance at 75 bps "especially if/when seen on a weekly closing basis, would bring the long-term picture into play and suggest a test of the 89 basis point area"
On EUR/CHF, CitiFX say:
- Still looking for further lows for the CHF
- Say the SFR is an attractive short in the current environment ... Swiss National Bank is not likely to tolerate renewed rally
- "Recent CHF weakness a function of reduced peripheral spreads. Though markets have moved to lower probabilities of further cuts, these could re-emerge"