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Us10yr

..an attempt to showcase the flatteningFlattening for the close. Getting a couple of questions re; flattening after the hints in previous idea, for those following 10s30s you will notice the test of 55/54bps is underway. ↳ The latest breakdown is implying we are at the minimum here in an ABC expectation leg towards support ↳ Inflation readings will be key to drive this one, this is signalling a dangerous environment for equities and risk in general going into September. ↳ To the other side, buyers will need to break through 11th May highs to call for reassessment in the flattening view.
TVC:US30YShort
by ridethepig
3
US 10 YEARS - THE TREND IS YOUR FRIEND...Looking at the weekly chart we can see that current levelis below both, MBB (@ 1.5630%) and Kijun Sen (@ 1.3851%). Wait for weekly closing for confirmation ! In the meantime, the expected target of 1.2890 % (38.2% Fib ret) has nearly been reached with a low so far @ 1.30 % ! Pressure remains to the downside , next significant supports levels being respectively @ 1.14 % and 0.99%. Watch D1 , H4 and shorter time frames to get clues and intermediate signal (s) for validation or invalidation of the expected bearish (yield) scenario. Ironman8848
TVC:US10Y
by Ironman8848
2
US 10 yr yields are very likely to test 2This has meaningful implications on equity markets and tech. It looks increasingly likely that blow out earnings will mark near term highs for FAANG. As a quick reminder, higher yields increase the discount factor suggesting future earnings, which are important for high growth tech, are worth less today. That argues for a lower multiple and points to relative under performance. Powell looser for longer and Biden sanguine on near term growth, enabled by more fiscal stimulus, makes the risk of runaway inflation more pronounced and the bond market is likely to price that in, now. I am looking for a test of 2% for the 10 year and failing momentum for FAANG, post earnings. THIS IS NOT INVESTMENT ADVICE, DO YOUR OWN RESEARCH.
TVC:US10YLong
by Yearsofcharts
Black Swan - US Government Bonds 10 YRSpeculation for US Government Bonds: "If you want to learn how to trade, go down to the beach and watch the waves." - Ed Seykota After reading this, I went down to the river and watched the waves for a bit, and came up with this model. If you think of a river, the riverbanks are made of sand and pebbles... Each pebble and grain of sand are underlying conditions. Together, they create a hard boundary, that the waves cannot traverse and bounce off of. There are unknowns beneath the surface, which can only be detected with signals and indicators, from the behavior of the waves. The waves bounce off each other to create ripples, and sub-waves in the opposing direction, at the middle, they form a stalemate, this is the Line of Least Resistance (LLR). There is a current, coming from upstream, and all the way down to the sea, which ultimately cannot be resisted. However, there are large objects - stones usually, that break out of the surface and create ripples of their own as the current bounces off of them. These are typically large events. It is interesting to watch little whirlpools of volatility form as energy is trapped in between such ripples! The trader is the bird, who lands in the river and gets swept to another location. It is up to the bird's judgement to predict where it will take them. Perhaps they will be swept to danger, or a prize beneath the surface. Housing: - Commodities and building materials are being speculated to unprecedented rates. Lumber almost $1700 for the forward contract. - Fed maintain that inflationary effects are “transitory” and remain dovish on monetary policies. It can be speculated that such the inflationary effects will continue in commodities if such dovish monetary policies are maintained. - Commodities being speculated to such prices affects house prices due to the scarcity of resources. It also erodes price margins of house-builders. Cryptocurrency: - Cryptocurrencies have served as a faithful indicator for real inflation perceived by investors. Semiconductors: - There is a global semiconductor shortage. - China is the greatest importer of semiconductors. - US trade sanctions have cut their supply of this most vital component. - However, US's largest imports are capital goods, followed by consumer goods and industrial supplies and materials. - China was the largest provider of foreign goods to the US supplying 18.6% of all US imports in 2020. - "Europeans found the Chinese amusing for their rejection of paper money... People presumed that the Chinese were five generations behind us - In reality they were a generation ahead of Europe. Under the Mongol emperors they had experienced a boom in which paper billions were issued to finance military conquests and vast public works, only to go through the bitter deflationary consequences - and the impression of all this had lasted through many subsequent centuries." - Jim Rickards Bonds and Interest Rates: - Investors are euphoric, reciting the mantra of "don't fight the Fed," however, when Janet Yellen cracked and let a neutral comment slip, the markets tumbled. Institutional investors are wary, and prepared to exit at the first sign of trouble. Risk is great in a vertical market, especially in a speculative bubble. - It is believed that bears are praying for a black swan event to crash the market... I beg to differ. To me, it seems like the bulls are praying for a black swan... The possibility of QE being extended forever. "There is no inflation. Interest rates won't be raised. QE tapering won't happen. It will be different this time!" - Inflation must be maintained at all costs in the Fed's mind. Inflation erodes debt. - The US is the largest debtor nation in the world... It cannot endure deflation. Deflation raises the real value of debt. - However, when inflation rises, bond holders will sell their long-term bonds, as inflation corrodes their value, so interest rates must be raised. Typically, higher inflation leads to higher yields, which translates to higher interest rates. - Now, the Fed simply buys their own bonds. They buy their own debt with fabricated money to create artificially higher bond prices, keeping yields controlled, therefore signaling that inflation is not rising, so they do not have to raise interest rates. - This is a false impression of demand, and it debases the currency against real commodities and assets. It inflates the everything bubble with cheap money. Everything is to manipulate interest rates, which is the signal for economic health. - Low interest rates stimulate economic growth due to easy lending, and inflation does indeed translate to higher levels of spending. Speculation: - In retaliation to the semiconductor shortage, China is squeezing the global commodities market. - COVID-19 is squeezing global production. - House builders will be priced out and abandon projects, and eventually home-buyers too will be priced out of the market. Then - when there are no more buyers, real estate investors will flood the market with their assets which are no longer appreciating in value, having obtained a cool 70% profit in a year (XLRE). Tangible real estate likely yielded much more. - Cryptocurrencies' speculative bubble will pop, as blockchain technology has fully been harvested. It's speculative prices are not needed for it to function. - There are 2 paths that I see for the Federal Reserve: (A) QE Infinity, YCC, etc. Printing more and keep the game going until it cannot. (B) Naturally allow bonds to return to true price, completely destroying the everything bubble. - There exists a $1.5 quadrillion USD derivatives overhang, in addition to the "everything bubble". It is possible that the Fed can no longer opt for option B. As we saw with Archegos/Credit Suisse and Robinhood/Citadel, there are massively overleveraged funds that are pricing in a QE hard floor, with liquidations just beneath the surface. - If you think that these hedge funds learned their lesson from Archegos, you are wrong. Institutional trend traders - how do they make money? They buy the dip until it doesn't work. Market maker quant firms like Citadel - how do they make money? They use monstrously leveraged positions to capitalize on miniscule bid-ask spreads. They will easily be swept by an unexpected and volatile move. It is the private investor only that dares to go against the trend. There are business fundamentals trading funds. They too will capitulate when nothing is going their way. How telling it was when every major broker locked down to prevent a mere $80~ billion liquidation during Gamestop's first rise! - It is likely that eventually, the Fed will lose control, and there will be an inflationary shock. How the Game Ends: - What is truly fascinating is that if you think about it... the Fed can indeed "print money" forever. They are the world reserve currency. - There is but one way the game ends... China will release their blockchain backed digital currency (DCEP/CBDC), while accumulating real commodities and capital goods. - CBDC's are favored by the G20, IMF, BIS et al. (financial elite), as they address tax evasion. There is an estimated $36 trillion in corporate tax havens (as of 2016). A global sanction of China is unlikely. - China and the eastern bloc will simply exit the western Federal Reserve System, they will capitulate on the US Dollar, and demand commodities and real assets. When the Bretton Woods Agreement was abandoned, a potential crisis caused by a run on gold was averted, but this time, there is no escape. - Soon, the world will have to choose between money backed by military power and money backed by tangible goods. My friends, it is possible that the river has at last found its way to the wide ocean... The possibilities are infinite. "Allies — the strongest and truest in the world: underlying conditions" - Jesse Livermore GLHF, DPT Disclaimer: We absolutely do not provide financial advice in any shape or form. We do not recommend investing based on our opinions and strongly cautions that securities trading and investment involves high risk and that you can lose a lot of money. Loss of principal is possible. We do not recommend risking money you cannot afford to lose. We do not guarantee future performance nor accuracy in historical analyses. We are not registered investment advisors. Our ideas, opinions and statements are not a substitute for professional investment advice. We provide ideas containing impersonal market observations and our opinions. Our speculations may be used in preparation to form your own ideas.
TVC:US10Short
by UnknownUnicorn1043646
6
Chart of the day: It’s not reflation without higher bond yieldsThe move lower in US10Y in the past few sessions has been the talk of the town in the finance industry, especially after all the rigmarole caused in the market by the rapidly rising yields over the past few weeks. With US10Y testing key support at 1.60 – 1.62 the question that the market’s wanted answered is whether we see yields bounce from key support, or whether we take out key support and continue to counter trend grind lower. It was an important question to ask due to the impact that the move in something like US10Y can have on the Dollar, Gold and the JPY. The grind lower in US10Y this week saw Gold push back into a key level of resistance in 1760 and USDJPY revisit key support at 109.30. So far, it seems like US10Y has been able to hold the first test f key support. That of course doesn’t mean the move will just be straight line higher from here as we could still test lower again and could even break support. However, in line with the balance or probabilities and the path of least resistance we would expect US10Y to grind higher in the weeks ahead. Attention now for US10Y in the short term turns towards today’s PPI numbers for the US.
TVC:US10Y
by thunderpips
14