David Fuller's view Monitor the financial world by viewing price charts.

Government Bond Yields

EU (German) 10Yr (weekly & daily) has enjoyed safe haven status within the EU but now shows evidence of a base formation as the region's prospects show some evidence of recovery. A move beneath 1.5% for more than a day or two would be required to indicate a drift towards the lower range before this developing pattern eventually supports a higher yield.

UK 10-Yr (weekly & daily) appear to be forming a first step above their base formation. Watch for a break in the progression of lower rally highs during the late-June to July period, for evidence that yields are pushing higher once again.

US 30-Yr (weekly & daily) and US 10-Yr (weekly & daily) remain the most influential yield trends to monitor, as they will continue to influence so many others given the USA's still dominant economic position. The 30-Yr was testing the upper side of its recent consolidation range earlier today but ended lower in a key day reversal. So the consolidation of earlier gains continues but a move below 3.4% would be required to delay significantly an advance into the 4% to 5% range. Similarly, 10-Yr yields would have to close beneath 2.4% to have the same effect, delaying a move into the 3% to 4% range.

Canadian 10-Yr (weekly & daily) has a similar pattern to the US above and could not maintain today's upward break. So the consolidation continues but this would need to close beneath 2.3% to delay significantly the next upward move.

Australian 10-Yr (weekly & daily) most closely resemble the UK above, although they are less firm at the moment. A close beneath 3.6% would be required to delay further the overall upward bias.

Japan 10_Yr (weekly & daily) has a different pattern in that there is no rounding (type-3 as taught at The Chart Seminar) base formation. Instead, it had an accelerated, climactic (Type-1) ending, followed by the strong (Type-2) rebound. It is now in the right-hand extension phase of this basing pattern which is likely to be continued for at least the medium term, before yields eventually resume their recovery.

Conclusion - The end of a 30-year plus bull market for developed country long-dated government bonds, which was extended by the 2008 economic collapse and subsequent quantitative easing (QE), carries further risks for investors in these markets. Yes, some long-term investors may choose to hold these positions to maturity, ensuring that they get the nominal value of their capital back in addition to the ongoing yield. However, subject to the maturity date of those issues, they may find themselves 'locked into' a bear market which reduces their manoeuvrability, should they need to raise cash or wish to switch to other investments.

Lastly, I would certainly not want to invest further capital in the bond markets shown above, despite some evidence of disinflation and the continuation of QE. It has not prevented this year's rises in yields and they will certainly move higher as the global economy gradually recovers over the medium to longer term.

Some stock markets which are now performing that you may not have noticed

Qatar DSM 20 (weekly & daily) began to surge higher following a successful test of its yearend 2012 low in mid-April. It is somewhat overbought in the short term but remains supported by the large trading range developed since the early-2011 high, and a close beneath the June low near 9170 would be required to delay significantly further gains.

Dubai Financial Market General Index (DFMGI) (weekly & daily) this experienced a devastating decline following its 2005 peak but the large (Type-3, ranging time and size) base formation which commenced in 2009 has supported this year's recovery to date. It is currently somewhat overextended but a close beneath 2200 would be required to delay significantly additional gains over the medium term.

Saudi Arabia (weekly & daily) experienced a huge decline following its accelerated (Type-1) peak in February 2006. However, it has nearly completed its lengthy (Type-3) base which has been forming since yearend 2008. Currently, it is somewhat overextended in the short term and also testing potential resistance from the 2012 high. While a break in the sequence of higher reaction lows shown on the daily chart would signal a longer pause for this momentum driven market, a sustained push above 8000 would open the door to further gains over the medium term.

Conclusion - It is a good sign that these three stock markets have not only bottomed out but are now showing relative strength, despite worrying strife which continues in several other Middle Eastern countries. Additionally, it will be interesting to see if they face a further headwind as many of the larger or more widely covered stock markets show some loss of form following their strong bull market advances since yearend 2008 and early 2009.