The Bottom in Bonds?
The 30-year bond futures market has undergone notable shifts, commencing with a bottoming evident in late October. This trend has been significantly influenced by the unveiling of inflation figures, particularly the Consumer Price Index (CPI) and Producer Price Index (PPI) in November.
Economic Data Driving Bonds:
PPI indicated deflationary pressures, while the CPI surprisingly showed no increase, setting a distinctive tone in the market. The recent revelation in real consumer spending further added to the intricacies, with a downward revision of 3.6%, falling short of the expected 4.0%. Despite a marginal increase in savings rates month over month (3.8% in October compared to 3.7% in September), signs suggest a potential deceleration in consumer activity.
Of paramount significance is the vulnerability observed in the labor market. A deeper downturn in labor market conditions could propel bond prices higher, fueled by heightened expectations for interest rate cuts, particularly for the month of May.
Major Technical and Fundamental Headwinds:
The bond market currently faces a critical obstacle in the form of overhead resistance within the range of 117-22 to 119-05. Market participants are eagerly anticipating a decisive break and close above this level, viewing it as a pivotal indicator that would lend robust support to the anticipation of an upward trajectory in bond prices.
Investors and analysts alike are vigilantly monitoring economic indicators and labor market trends, recognizing their pivotal role in shaping the future direction of 30-year bond futures. The interplay of inflation data, consumer spending patterns, and labor market dynamics sets the stage for a nuanced and closely watched landscape within the bond market.
Check out CME Group real-time data plans available on TradingView here: tradingview.com/cme/
Disclaimers:
CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs tradingview.com/cme/
*Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services.
Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.
Economic Data Driving Bonds:
PPI indicated deflationary pressures, while the CPI surprisingly showed no increase, setting a distinctive tone in the market. The recent revelation in real consumer spending further added to the intricacies, with a downward revision of 3.6%, falling short of the expected 4.0%. Despite a marginal increase in savings rates month over month (3.8% in October compared to 3.7% in September), signs suggest a potential deceleration in consumer activity.
Of paramount significance is the vulnerability observed in the labor market. A deeper downturn in labor market conditions could propel bond prices higher, fueled by heightened expectations for interest rate cuts, particularly for the month of May.
Major Technical and Fundamental Headwinds:
The bond market currently faces a critical obstacle in the form of overhead resistance within the range of 117-22 to 119-05. Market participants are eagerly anticipating a decisive break and close above this level, viewing it as a pivotal indicator that would lend robust support to the anticipation of an upward trajectory in bond prices.
Investors and analysts alike are vigilantly monitoring economic indicators and labor market trends, recognizing their pivotal role in shaping the future direction of 30-year bond futures. The interplay of inflation data, consumer spending patterns, and labor market dynamics sets the stage for a nuanced and closely watched landscape within the bond market.
Check out CME Group real-time data plans available on TradingView here: tradingview.com/cme/
Disclaimers:
CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs tradingview.com/cme/
*Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services.
Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.