US 5s30s consolidate: BofA Merrill Lynch

Quotes from BofA Merrill Lynch:

- While yesterday's close above the 60d average (now 115.8bps) was the first since Oct-28 and only the second instance since Dec'13, we maintain a flattening bias. 

- With daily momentum now overbought, further steepening should be temporary and limited to the Jan-20 high at 122.1bps, worst case, 1.4yr trendline resistance at 127.1bps before the larger flattening trend resumes. A break of 100bps (the range low) confirms a return to trend, targeting 85bps ahead of secular channel support at 64bps. 

- A break of channel resistance (now 127.1bps) points to a greater base and turn in trend for 139.7bps. However, to be clear, this is not expected.