10yearbond
ZN - 10 Year Note 2 HourNews this coming week will impact Markets in a broad fashion.
ZN can see a larger RT to overhead POs as can ZB (30Yr) should
The FED engage in larger YCC interventions, and I believe they will
intervene heavily.
Macro Data Ahead:
MONDAY, MAY 16
8:30 am Empire state manufacturing index May
TUESDAY, MAY 17
8:30 am Retail sales April -- 0.8%
8:30 am Retail sales excluding vehicles April
9:15 am Industrial production index April
9:15 am Capacity utilization April
10 am NAHB home builders' index May
10 am Business inventories (revision) March
WEDNESDAY, MAY 18
8:30 am Building permits (SAAR) April
8:30 am Housing starts (SAAR) April
8:30 am Philadelphia Fed manufacturing index May
THURSDAY, MAY 19
8:30 am Initial jobless claims May 14
8:30 am Continuing jobless claims May 7
10 am Existing home sales (SAAR) April
FRIDAY, MAY 20
8:30 am Advance services report Q1
US 10Y Bonds...What Do We Know?TVC:US10Y
With the wild drops in the market over the last few weeks, I have considered turning a greater percentage of my portfolio to bonds. Listed in this article are the findings of my research.
Todays Yield closed at 1.341%, investors receive a coupon of $1.375 semi-annually. Wow...That is pretty discouraging. With insanely low interest rates this year, (Note interest rates and bond prices are inversely related), bonds are expensive for very little yield. The feds have released data on a 6.20% inflation rate which is rather naive in my opinion, considering they continue to print money. The M2 Money Supply measures the total cash and equivalents in the USA, this grows on average of 11.31% a year, we are at a YTD of about 37%. Over three times the average currency printed. This large money supply is a main factor in why interest rates are so low. So will interest rates ever grow back to their pre-COVID levels? That is not for me to answer, as I have no idea. I enjoyed a projection done by @RealMacro about how we are rapidly heading towards a recession. I believe all investors can agree that it is perfect market conditions for a recession. Many investors are very new; they have never experienced a recession, this has come from the meme stock phase. Will investors begin pouring into fixed securities? Is the security worth the expensive costs and low yield? Will the feds continue to purchase bonds back? It is important to note, when the Feds buy back bonds they are increasing the money supply in the economy by swapping bonds for cash, and opposite when selling bonds. If the Feds wanted to cut back inflation wouldn't it make sense to sell more bonds? But by cutting back interest rates, would investors really have an incentive to purchase bonds?
Key Notes:
M2 Money Supply Measures the total cash in circulation
Bond Buy Backs - Increase Money Supply
Bond Sell Offs - Decrease Money Supply
Money Supply and Interest Rates are inversely related
Bond Prices and Interest Rates are Inversely related
Bond Yields and Interest Rates are parallel
NOT INVESTMENT ADVICE - I am not a licensed Advisor
U.S Bond Yield's & Trading EUR/USD, USD/JPY & USD/CHFIn this video, I break down how the U.S Dollar has been strengthening against the EUR. JPY & CHF since the start of 2021 as U.S Bond Yields have been rising due to inflation expectations.
This is extremely important to understand when trading currency markets.
I breakdown this historical relationship using excel spreadsheet examples and live chart analysis.
Enjoy