Chart Book

Chart of the day: Keep an eye on stocks and bonds

PUBLISHED : Wednesday, 14 February, 2018, 8:00am
UPDATED : Wednesday, 14 February, 2018, 8:00am

The fortnight preceding the Lunar New Year saw jittery stock markets keeping an eye on bond yields, wondering whether they should feel worried. For Chinese markets, the holiday might be a good time to take stock and see if the global dust settles. China’s 10-year sovereign bond yields soared to 4.12 per cent in January, having struggled at the 4 per cent area in the previous two months because this is a Fibonacci 61 per cent retracement from 2014’s high of 4.77 per cent, in turn lower than 2008’s high of 4.94 per cent and 2007’s at 5.05 per cent – a secular series of descending peaks. A close below the thin Ichimoku cloud and another below horizontal support at 3.87 per cent confirm a top in the yields, so futures prices should rally.

Nicole Elliott is a technical analyst