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Chart 81: US 10yr yield (top) and US 30yr yield (bottom) weekly chart SMUSGGIOYR MSHAVG = | “Om 5.0000 = “=. 4.7500 4.5000 100,0%( 4.0095 — 3.7500 3.5000 3.2500 61.86(2.9813)1 3 nog0 50.02.6637 )+ 2.7500 38.2%(2.3461 Breakout 2? BUSGG30YR MB SMAVG FS.2500 100.0%(4.8559) [5.0000 +4.7500 + 4.5000 r4.2500 +-4.0000 F 3.7500 50.0%(3.4721 He 3,5000 61,8%(3.7986) Ts Breakout 2738.2%(3.1455)[ 3.2500 z b3,0000 | Breakout 1 2.7500 “ss + 2.5000 “>=. 0,08(2,0882)f 720° ~s = F 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. Bankof America 2” Global Rates, FX & EM 2017 Year Ahead | 16 November 2016 49 errill Lynch HOUSE_OVERSIGHT_014779