Chart 81: US 10yr yield (top) and US 30yr yield (bottom) weekly chart 5.5000 L =e BSMAVG = ee 5.0000 AN = mee 4.7500 i = mI ea a 4.5000 ° - TS seas - 100.0%( 4.0095 — aS , A ee 3.7500 \ i Maas vl ~— . ae 3.5000 | Ha ae | ae B 3.2500 l i i tity A 61.8%(2.9813) 3.0000 i a " 2 aE i 50.0%( 2.6637) 2.7500 mye ENN EE Ei = _treakout 22 38.28(2.3461)$ 2.5000 i F NT f) Pa 4 lao 2.2500 | ‘ Ay 4 NE , (i Ns cae 1.7500 IN: - fy reakout 1 o.ostiae 1.5000 A C £0000 MUSGG30YR MSMAVG soto i 5.2500 Mb, 100.0%(4.8559)f 5-0000 i rat : ak i 4.7500 i i il a ‘ 4.5000 WY \ | i | : 1 oo 4.2500 | DNs oncaaranth 300 | a AS . alia 1, ea 50.0%(3.4721)1 3 sop9 7AM, na re ss Breakout 2738.28(3.1455)f 3.2500 fil ly p WN 7 = 3.0000 4 ee” | 2.7500 4 ‘ i Breakout 1 - Ni i Kt f’ ~~~. 2.5000 ‘ Vh “7 =~. 0.08(2,0882)f 22500 E ~s = 2.0000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: BofA Merrill Lynch Global Research, Bloomberg German 10yr bund yield breaks out Bund yield has risen through resistance levels and is up about 60bps from the low. Prior uptrends failed at trend line resistance levels; however, this time it broke through. The distance traveled during prior moves include +140bps, +93bps and +108bps. Therefore, we believe this uptrend has room to continue to 55bps (estimated 200wk SMA) by 1Q2017 and to 75bps in 2017. Japanese 30y yields form head and shoulders bottom The rapid decline in 30y JGB yield during 2016 led to a trend exhaustion signal at the lows (TD Sequential 13}, a rise resulting in the most overbought (higher yield} momentum since 2010 and the formation of a head and shoulders bottom. Provided yield remains above 44bps, we could see yield rising to 71 bps and possibly 87bps in 2017. coun ct Amestea 2 Global Rates, FX & EM 2017 Year Ahead| 16 November 2016 49 errill Lynch HOUSE_OVERSIGHT_014779