BofA Merrill Lynch:US 10yr and 30yr Treasury yields are correcting higher as ESM5 is returning to trend. Across the curve, we are bullish US Treasuries, targeting the January yield lows (39.6bps in 2s, 1.150% in 5s, 1.636% in 10s, 2.218% in 30s). Yield bounces should be seen as temporary and corrective. Looking specifically at 30s, yield gains should be limited to 2.594%/2.633%, while 10s should be limited to the 1.975%/2.012% area before the larger bull trends resume. Turning to ESM5, we reiterate our bullish view. Evidence still says that the 6wk contracting range is completing as the larger bull trend resumes. Upside targets are seen to 2104.75 (Triangle resistance), ahead of 2136/2175. Pullbacks should not break 2033.25 and can’t break 2029.00
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