The Yield Curve has been inverted for a long time, and as rates are about to go lower, it can finally un-invert. When the 2-year yield is higher than the 10-year yield, the chart is above 1.0 ; But once the 2-year yield dips below 10-year yield, the chart should drop below the 1.0 mark.
The 2/10 treasury yield spread is quickly flattening and an inversion could happen soon. All of the previous yield curve inversions are associated with memorable market sell-offs and recessions. I believe the ripple effect of the ongoing financial and economic sanctions against Russia will end up being the catalyst for the next meltdown. The market conditions...
The Bond Yield Curve, which can be calculated by substracting the US 2 Year bond yield from the US 10 Year bond yield, has been inversed for quite some time. An inversion of the bond yield basically means that bond traders require higher returns on short-term bonds than on long-term bonds, which translates to short-term bonds being more risky than long-term ones....
This is called the "Steepener" trade and refers to a mean reversion in the yield curve. From current level of (-38 basis points, or -0.38%), I'm targeting a move back to 1.00%, or ~70bp, risking down to about (-45bp), or about (-13bp) downside. Yield curve steepeners seek to gain from a greater spread between short- and long-term yields-to-maturity by combining...
This chart shows the effective federal funds rate in comparison to the 30 year and 3 month yield over the past five years. There are 5 interesting times to look at: 1. Late 2018 long term yields began to peak right before the fed stopped their hiking cycle. Yield curve began to flatten. 2. They then stayed put for about 6 months with the 3MY hovering right...
In this chart you can see how inverted we are and for how long on the 10-3mo. I also have the 10-2YR chart that I will link to this also. This is a recession indicator. It will be interesting to follow this chart as the FOMC tries to bring the curve back under control. I will return frequently to run the "Play" and see how they do over the months!
The 2-year and 10-year Treasury yields inverted for the first time since 2019 . On Thu Mar 31st , the yield curve showed a possible warning signal that a recession could be happen at anytime, but the curve needs to stay inverted for a substantial amount of time before it gives a valid signal. People get excited about the yield curve because, historically it...
Lots of chatter in the market about the US yield curve headed ever closer towards inversion – clearly, much of this move has been driven by short-term rates which have seen 2yr Treasuries push to 1.19% (the highest since Feb 2020), with fed funds futures pricing close to 5 hikes through 2022. I have shown the US 2s v 10s spread, but US 5s v 30s is certainly...
Crypto started rallying after the halving, which coincided with long interest rates rising as the COVID-19 pandemic appeared in March 2020. By injecting massive amount of liquidities, the Fed was also sowing the seed for higher inflation. From mid-April 2021 to mid-July 2021, the rates took a break mid-way thru it's cycle. Lower interest rates means that the...
Hoping for 10y yield to retreat relative to 30y yield, which would usher more strength and stability. Seems contingent on a sub 1.5 10y yield. The falling wedge gives me a lot of hope despite a false breakout near the end of January.
With growth and inflation rising, leading to a steeper yield curve, financials should continue to perform. One name that sold off meaningfully last week was ECPG. The debt collector should continue to do well in the immediate term given the macro tailwinds to the sector. I'd be a small buyer here, playing for a return to the recent range.
This is a simple analysis of the yield curve vs. the sp500.
Amazon could stay in the uptrend (green line) until yield curve inversion (10yr - 2yr Treasuries spread becomes negative) and then crash (red line). Current news about yield curve inversion of 5yr - 3yr Treasuries is premature. That indicator was 4 years early in 1964, 3 years early in 2005, and usually was 2 years early.
Not much arbitrage play for Financiers with this yield, which one of the many reasons I am short Banks. Ichimoku not showing any signs of relent.
Looking at forward indicators against the SPY including Copper price, SOX semi-conductor ETF, ADR and Yield curve.
Yield curve inversions preceded recessions and stock market declines (by 3-22 months). fred.stlouisfed.org
If yield curve inverts in 2019, there are four likely outcomes.
Here is a trade based in 100% Fundamental approach. BUT: Always limit your risk regardless how strong your conviction is. ALWAYS! Trade safe, Trade well