While many of us celebrate the stock markets reaching new highs, central banks worldwide are actively purchasing gold, and institutions are hedging into treasuries and yields. Interest rates are determined by the central banks whereas Yields are determined by the investors. If you choose to lend or borrow money over a longer period, such as 10 or 30 years, you...
The famous negative curve. This market concept is used when the US02Y or US03Y operate at higher levels than the US10Y, this behavior usually anticipates recessions, but why does this happen? The inversion of the yield curve distorts the expected functionality of the financial system. Under "normal" conditions, raising funds in the short term for investment in...
Interest rates are crucial in the movement of currencies. The blue is EURUSD. Those things are not 100 percent correlated but it is something that needs to be paid attention to. In this post I will demonstrate the relationship between French American bond yields (interest rates) differential and EURUSD. We use 2 principal yields 2 yearly and 5 yearly composite...
Interesting days are coming. In my analysis, I indicated that there could be a 50 basis point cut in interest rates. Although intervention could have been anticipated, early in the morning, it surprised everyone. Let's look at the analysis. Apparently it did not affect market pricing. We have reached the technical target price. This is 0.611% (The chart in the...
Dollar interest rate cut by 50 basis points. 2020.március.18. www.cmegroup.com My analysis charts the market expectations of a dollar cut in interest rates. The reason I like to use the US02Y chart is because it gives you a much clearer idea of what the market is doing. With a fractal analysis, the future movement of the interest rate path becomes foreseeable in...