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US30Y: Rising Yield as the expectation of Rising Interest Rate?U.S. Inflation has surged significantly to 8.5% in March 2022, It hits a new forty-year high. As the Inflation keeps increasing month over month, The Federal Reserve is committed to tackling inflation by Rising Interest Rate, potentially 0.50% in May 2022. The rising interest rate will cause bond prices to fall. Consequently, The Bond yield will be increased. Chart Perspective: US 30 Years Government Bond Yield (US30Y) has broken out of the falling wedge pattern. US30Y is also accompanied by a golden cross on the MACD indicator. We conclude from the macro and chart perspective, That is a potential bullish outlook for US 30 Years Treasury Yield. The roadmap will be invalid after reaching the support/target area. *Disclaimer: The outlook is only used for Educational Purposes, The Creator doesn't responsible for any of your trade position or other financial decisions*
TVC:US30YLong
by financialfreedomgoals101
2
Interest rates, Inflation and how to trade it.Hey Traders, Massive week this week fundamentally for the Forex market. 3 big interest rate decisions being released so I thought there was no better time than now to have a chat about what it is, what it indicates and finally, how traders profit from it. Fed and BOE almost guaranteed to hike rates, RBA is sitting unsure. Have a watch of the video and I am more than happy to have a discussion in the comment section! As always, have a fantastic trading week and I wish you all many profits.
Education
by the5erstrading
4
Breakout Of the 40 Years Old DowntrendUS 10 year bond rates are important indicator for investors. If its go up, it means investors are selling their bonds expecting interest rate rise from FED. This is happening for over 1.5 year now. Investors are selling bonds because they think inflation coming and FED will act accordingly. High interest rates cause risky assets, like crypto and stock market, to lose value. In this Monthly chart, Something huge is happening with the 10 years right now. We were in a downtrend that started in 1981. We tested the trendline in 1984, 2007, 2018 but never able to break it out. Last months, breakout occured and we may retest the trendline before going up. Around 3.25 area seems to have a strong resistance. Also around 3.25 area, investors may want to buy bonds therefore 10y rates can pause their rise for a couple of months. The breakout of this decades long trendline may mean that, we entered a new period of high interest rates. But in the end everything will be decided by FEDs actions. Thanks. Follow for more information and charts about markets and global economy.
TVC:US10YLong
by thegreatwall38
Are we going to see a new low on EURUSD this week?The downside move continues and it looks like we will see another low on EURUSD. The pullback that happened on Friday gives us a chance to enter short again with targets at 1,0400. This week, we also have FED Interest rate as well as NFP. That could possibly mean big moves and potential reversals. At the beginning of the week, we're looking for a breakout of the previous low and we don't want to see price breaking above 1,0600!
Short
by ForexTrendline
22
AUDCHF Heading to the downside? (FUNDAMENTALS)Hey Traders, AUD is showing weakness as the RBA are ready to start hiking rates, this data is usually already priced into the market but it is the meeting minutes which indicate where we are heading into the future. Also expecting lower retail sales data later in the week. CHF is looking rather bullish, on the other hand with not much room for the Monetary Policy to ease the outlook is rather Dovish. The data releases do remain weak but with stocks heading lower I can see money flooding into the CHF. As you can see by the chart, we have formed and broken a clean flag pattern on the 4h timeframe. Keep an eye on how this chart runs and the reaction to the interest rate hikes by the RBA. Good luck traders!
Short
by the5erstrading
1
Gold PivotsWe mentioned yesterday that gold was starting to look oversold at 1876, and sure enough, we got a nice pivot back to the 1900's. We started to see support between 1876 and 1895 confirmed by green triangles forming all the way through this vacuum zone. This suggested that the massive selloff from 2000 was coming to a close and the pendulum was due to swing back. We subsequently blasted through resistance in the 1900's and are currently testing 1917, where we are meeting resistance. This level corresponds with relative lows from the value area established at the end of March and the beginning of April. We should see pretty strong resistance here but if we are able to break through, we will regain the price range between 1917 and 1956.
COMEX:GC1!
by quantguy
1
AUD/USD & AUD/JPY Analysis / Iron Ore & InflationThe Australian Dollar has weakened in recent weeks due to Iron Ore prices declining as China's zero covid policy has caused investors to fear a slowdown in the world's second-biggest economy. Australia exports 80% of Iron ore to China, so any slowdown in China will hit demand for Australia's commodity exports and put downward pressure on the currency. We also have Australian inflation data out tomorrow, which could surprise to the upside and beat economists' forecast, causing a rally higher in the Australian Dollar on rate hike expectations. In this video I break down what could play out and how to make money from the potential outcomes.
COMEX:TIO1!Long
by KayansMarkets
GBP/USD - Short Sell Fundamental and Technical Set Up UpdateThe Pound has extended its weakness against the U.S Dollar as the UK economy slips closer to a recession. The UK cost of living crisis, which is down to high energy prices, rising taxes, and now higher interest rates is increasing the public mortgage, credit cards, car loans, student debt and other debt payments, causing investors to question the amount of interest rate hikes the Bank of England can deliver without causing a recession. I break this down in more detail in the video.
Short
by KayansMarkets
EURUSD: History doesn't repeat, but it rhymesWell, well, well... Interesting chart we have here. If you're a keen central bank watcher like we are at Macrodesiac, then you'll have certain comments signposted at certain dates and prices. The first one to take note of is Draghi's comment back in July 2012... WHATEVER IT TAKES This phrase is famed for 'saving' the euro back then during the sovereign debt crisis... And we saw the euro rally from lows of ~1.20, all the way up to ~1.40... But it died a death again. More recently, we have Mdme. Lagarde's famous phrase... WE ARE NOT HERE TO CLOSE SPREADS This was back in March 2020 at the start of the Covid Crisis where Eurozone sovereign debt yields were widening massively (specifically Italian BTPs vs German Bunds). Interestingly, we are seeing these spreads widening at the moment... This puts the ECB in a bit of a conundrum, since they are most probably looking to end their asset purchase programme in June and crack on with hiking... The problem here is that the market, we don't think, is likely to take the announcement of tightening as a BAD sign for the euro, when if you were looking at yield differentials, you might say that euro strength should come into play since you can earn greater interest on it. We're essentially looking at the euro doing the OPPOSITE of what happened after Draghi's and Lagarde's comments at said prices. We are therefore not unconvinced that the euro could face a similar fate as it did in the years post Draghi, where it fell from the high of ~1.40 to the low at 1.05, which in current context, could mean a fall in EURUSD to 0.90.
by FinkPro
1
Housing is the KEY to controlling inflationI spent the weekend thinking about the housing market. Annoyingly, once a seed takes root in my mind it's going nowhere until it's fully grown. That seed started out as "What's the biggest risk for the Fed/inflation?" To my mind, it's this 👇 US WAGES, BENFITS RISE TO 2 DECADE HIGH AS INFLATION PICKS UP That's a summary of the last Employment Cost Index. You get the gist from the headline. Here are some quotes from an article we wrote back in January (happy to share with you if you PM me). 'The increases from the previous two quarters at 1% and 0.9% were already at the high end of ‘normal’ for the past decade. In isolation, those two prints could probably be explained away by economic ‘re-opening’. Q3 was a whole new level! Usually this isn’t an important data point. Released quarterly, it’s been pretty stable and boring either side of 0.6% for the past 10 years. In the current market context, the ECI is right in the market spotlight 👇' And it will be again on Friday (even though it's not marked as high impact on a lot of calendars). Summing up, the dreaded wage/price spiral is THE big risk. What's that got to do with housing? If you don't cool the housing market, you don't cool inflation. You might ask why. See chart 1 , chart 2 , and chart 3 . Basically, the price of everyone's biggest expense/outlay is going up. And it's going up FAST. If that's happening to you in a labour market with "1.7 job openings to every unemployed person", and a labour market that's "tight to an unhealthy level" (as Powell said after the last FOMC in March )... You grab your boss by the proverbials and demand a pay rise, or you look for a better-paying job. Either way, the goal is the same. Pay me more. Which is how the circular image in the idea happens... Why target housing? HOUSING IS THE BUSINESS CYCLE (Edward E. Leamer) Oh great, not another economics paper... Don't worry. This one has the best introduction to any economics paper you've ever read (yes, I know it's a low bar). The bad news is that I am not a macro-economist. Wicksell and Hayek and Keynes and Friedman and Tobin and Lucas and Prescott speak foreign languages with which I have familiarity but not mastery. The good news is that I am not a macro-economist. That frees me from the heavy conceptual burdens that most macro economists seem to carry. It allows me to conclude that Keynesian thinking, monetarism, rational expectations and real business cycles all suffer from the same problem – too much theory and not enough data. In particular, none of these comes to grips with the role of housing in modern US recessions. Glorious. In the paper, Leamer explains how housing starts are an excellent cycle leading indicator 👇 By virtue of its prominence in our recessions, it makes sense for housing to play a prominent role in the conduct of monetary policy. A modified Taylor Rule would depend on a long-term measure of inflation having little to do with the phase in the cycle, and, in place of Taylor's output gap, housing starts and the change in housing starts, which together form the best forward-looking indicator of the cycle of which I am aware. Last Monday, this happened. At the same time, this is happening. And so is this... The shift from "Prices too high! Something must be done!" to Housing unaffordable" in just four months is pretty epic... Here's some quotes from an article we wrote in February, on Zoltan, Credit Suisse's financial plumbing guy and his view on a bit of writing the market was going mad over back then... To slow OER inflation, mortgage rates need to get higher and house prices flat or outright lower. To slow all other services – driven by a shortage of labor – we need more supply of labor, not less demand for it through a recession. Again, inclusive low unemployment is a political imperative and, by extension, so is redistribution via stronger wage growth. If we agree on that, what follows is that we need to slow services inflation by slowing, not killing, wage growth, by bringing about more supply of labor, not less demand for it via a recession. Maybe to increase labor supply, we need lower asset prices… It's easy to look at all of this and think "something's gonna break, house prices will crash" or just generally panic and freak out. But this isn't 2008. Yes, housing will be less affordable for new buyers and refinancing, but that doesn't mean everyone who already owns a home is about to get rekt. Many have locked in mortgages at low fixed rates. Lending standards are far higher. As long as the economy holds up OK, they should have no problems servicing that debt. What the increase in mortgage rates does achieve though, is to stop house prices from rising further, or at minimum, slow the pace of price increases. The idea of a soft landing for the Fed is pretty dependent on this transmission working quickly. Reverse the wealth effect enough to slow the economy without taking it too far... Housing leads (see chart 2 in published idea above). And that's probably why the market is already pricing in rate cuts from 2023 (see main chart and the uptick in price of eurodollars from 2023). Summing up, the housing market's in for a rough ride. It's a risk but hitting housing is probably the best way for the Fed to get inflation under control sooner rather than later. The energy-driven slowdown in Europe & the Covid lockdowns in China could also play a role in slowing the global economy. Dynamic as the US economy is, it can't do everything alone.
G
by FinkPro
Bonds Continue the Bear RoutBonds have taken another turn south, after flirting briefly with 119'23. With the Fed maintaining their hawkish stance, there is little to support a breakout, or a significant technical retracement. We have broken through lows at 119'01, and are currently hovering over our next target at 188'04. The Kovach OBV has been abysmally bearish for some time now, but does seem to be gradually leveling off, perhaps indicating a bottom soon. If we see a relief rally, then 119'23 should provide resistance.
CBOT:ZN1!Short
by quantguy