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US 10YR Yield: A Possible Correction Ahead? US 10YR Yield has reached a yearly high at the 3.200% earlier this month. From the new high, the price retraced and retested the support level of 2.700%. In the 4-hour chart, we can spot a potential head and shoulder pattern. Therefore, we will observe if the price will break below the neckline area in the near future. If the neckline is broken, then we expect a period of correction for the US 10 YR yield. What does it mean for the market if the yields start to fall? Intermarket Relationship (Theoretical Explanation): Yields and Bonds: Inversely Correlated *Yield can be considered an interest rate. Because most bonds pay a fixed interest rate, investment in bonds becomes more attractive if interest rate falls. Therefore, two are inversely related. Yields and USD: Positively Correlated *A rising yield indicates USD appreciation while a fallling yield indicates USD depreciation. We can relate this relationship with the recent FOMC raising the interest rates, which has reduced the money supply to preserve the value of USD. As a result, yields rose and bond prices fell, and USD currency became more attractive to hold due to reduction of money supply. Yields and Commodities: Inversely Correlated *If yields increase, USD will appreciate; therefore, an expensive USD would lead to a fall in commodities prices because most of the commodities are priced in USD. Yields and Stock Market: Inversely Correlated *High yield environment leads to expensive loans, which discourage individuals from investing. Therefore, if yields enter into a period of correction, we first expect the USD, or the US Dollar Index to fall, which would lead EURUSD, GBPUSD, AUDUSD, etc to rise and USDCAD, USDCHF, etc to fall. From the charts of those USD pairs, we can spot that the retracements have already begun from their recent highs and lows. Check out our ongoing trading ideas below :)
TVC:US10Y
by NicoBeau_Capital
TLT may return to 132-135 neutral zone as a flight to safety.TNX 10-yr yield may have peaked out as investors rotate to the safety of bonds in the 120-114 accumulation zone. TLT has completed a big M-pattern stopping at almost perfect FIBO levels. This ABC wave has already made a 300% retracement from the ATH of 173.89 made last 9Mar2020 before pandemic striked. The 132-135 zone will be some sort of neutral area for determining inflation or deflation. It is also the neck zone of the M-pattern. As it fell quickly from this zone, the rebound will also be very fast looking at the volume profile that has a large space in between. 5 impulse waves & 3 ABC corrective waves have end this EW cycle & a new cycle shall begin as TLT returns to the baseline of my slanted FIBO CHANNEL where wave 3 had started at Feb2011. Not trading advice
NASDAQ:TLTLong
by xtremerider8
10 Yr T-note $TNX Break-out$TNX has broken out of its long-standing 35 year descending channel, first time breaking out above 50 EMA and pushinf towards 100 EMA since 1994. The descending channel includes both the dot.com and housing bubbles without breaking above the 50 EMA. Given add'l rate hikes on the table and bloated CB balance sheets, extreme supply of money in the markets, overnight reverse repo in the trillions... there's an incredibly long way to go walking back unfettered money printing, unless the Fed gives up and lets inflation run unabated. Either way, TNX isn't done climbing. Expecting a bear market rally to bring it back for a 50 EMA retest is reasonable and normal; however, the broader macroenvironment is unhealthy and there's more room for these yields to run this year.
TVC:TNXLong
by R0MM3LL
An inversed relationship There is a long running inverse relationship between gold and yields. As a non-interest bearing asset, gold becomes less attractive when yields, or real yields in-particular, go up. Using the TIPS (Treasury Inflation-Protected Securities) and inverting the price (price and yields are inversely related), we get a proxy for real-yields. With this, we can look at the 10-year chart of gold prices vs yields and the inverse relationship becomes clear now-- rising real yields push gold prices down! As gold is quoted in US dollar, the strengthening dollar has added salt to the wound, further weakening the price of gold. On a shorter timeframe, the 1875 handle seems to be of a significant level, providing the previous levels of support and resistance. With this support level breached last week and a retest this week, coupled with the rising yields and a strong US dollar, we see further downside for gold from here. Entry at 1875, stop above 1960. Targets are 1762 and 1680. Disclaimer: The contents in this Idea are intended for information purpose only and do not constitute investment recommendation or advice. Nor are they used to promote any specific products or services. They serve as an integral part of a case study to demonstrate fundamental concepts in risk management under given market scenarios.
COMEX:GC1!Short
by inspirante
US10Y-US02Y Yields Are Steepening NOWAhead of incredibly important CPI data to be released tomorrow, we are seeing yields steepen in a very dramatic fashion. In comparison to each of the last 3 inversions, this one is not even close to the past. It is important to understand that when yields steepen , it systematically leads to downside in the SPX/NASDAQ. It has been the indicator of almost every recession since 1980 . Now we can't jump to conclusions just yet, we can only try to anticipate what comes next. Tomorrow key CPI data gets released which is why markets are selling off in the face of it. This data will be the reason for the next move up or down. Focusing back on the chart, we can see just how far yields have deviated from the 200MA. In comparison to the past, this is the farthest divergence on record. IF yields were to retest that 200MA, it would almost certainly lead the markets down a very dark path rather quickly. We are seeing a clear momentum gain on the RSI to match this. Now let's take a look at the previous two inversions not shown in the chart; (2000, 2008) First, take note of where the 200MA is here in comparison to now. Second, notice when yields are Steepening the SPX is falling. They have an inverse correlation. Take a look at how extended the NASDAQ is still; The same can be said about the SPX; There are very significant moves being made in the markets at this moment, and it will take absolute diligence to ensure survivability if the markets take us down a dark path ahead. For now, pay attention to the data tomorrow. If it is optimistic, we could see some short-term relief. If it is worse than anticipated, watch CLOSELY! The projected CPI tomorrow is 8.4% . That's your best case going into tomorrow (April 12th) . Use it as a measure.
TVC:US10Y
by NoOneWhoIsSomeone
4
Yields are on the verge of breaking-out.In log mode, we can clearly see the trend of yields dating back to the late 1970s. Consistently lower yields on both the 2 year and the 10 year government bonds. Representative of both the long and short duration bonds and their yields. What we can see happening here is a breakout of this downtrend. We are already at between 2.5-3% on the 10YR and the 2YR yield. The Federal Reserve's planned tightening schedule combined with the inflation panic will drive both of these metrics up into the 3% range and beyond. The only way yields could reverse here is through seeing a risk-off move from equities into bonds which would drive up bond prices and in turn, drive down yields. Similarly, higher-yields could tempt investors into bonds at a point in which many stocks have already entered a bear market and many are set to underperform. Market breadth is set to shrink dramatically as equity bulls focus their efforts into a narrower set of large-cap stocks. The FED has an interest rates decision next week amd therefore this quarter will be crucial in determining the direction of the markets.
TVC:US02Y
by RogueEconomics
The #1 Chart to WatchLadies and Gentlemen, please take your seats. (...the music stops) Okay, thanks for playing. Good luck to all of you! The investment strategies that have worked for the last 40 years will no longer work. The true bear market is here. This will absolutely 100% NOT be a recession that will be forgotten easily. It most likely will be a depression via stagflation which we have never really experienced long-term. Our leaders won't admit it but *News Flash* the Supply Chains are NOT getting fixed like they were before. China has no incentive or interest to fix them and we are the world's biggest debtor. We got 20% of all our imports from them in 2021. That doesn't sound like a lot but that 20% is involved in the supply chains of 70-80% of our goods. The Chinese gov has already warned its people of the incoming food shortage and have been far more honest with their people than our Western leaders have been. Good luck in the New World Order! Courtesy of the World Gov. Summit 2022, the IMF, World Bank, etc. (Not Financial Advice, Just what I see.)
TVC:US10YLong
by MonetaryRebel
1
US10Y-US02Y Time To Pay AttentionEveryone is talking about yields inverting and the recession that follows it. Here I am going to do a quick rundown on how to actually use this information to your advantage. It is not the yields INVERTING that is cause for concern. This is only the first step of a potentially long process. It is when yields start STEEPENING that there is real cause for concern. There is no question that yields inverting is a recession signal, it has historically proven itself to be since the 1970s. But if you think the market is ready for a recession right at this moment of inversion, you are misinformed. Pay close attention to when the yield first inverts, to where/when the market actually enters a recession. It is not until after yields STEEPEN is when there is real downside. Now, this brings us to the chart, where we are potentially seeing the first signs of steepening. Not only from the yields themselves but from the Bullish Divergence on the RSI. As yields have inverted (gone down), the RSI has trended up, showing a clear divergence. Also, notice how far yields have deviated from the 200MA. If you compare it to 2000, it is potentially showing a very similar picture Even in august of 2019 we see the same divergence which signaled yields to begin rising. Which told us it was really time to pay attention in the coming months. These are just a few insights to hopefully help you understand what this all means in the bigger picture. Right now more than ever is the time to pay attention and to stay vigilant. Hope this helps! Here is my initial analysis on yields tightening, as well as the Yield Inversion in relation to the SPX:
TVC:US10Y
by NoOneWhoIsSomeone
Australian bond yields rise after RBA leaves key rate unchangedThe market is currently pricing 7 rate hikes ending in the Q2-Q4 2023 range. To quote Statement by Philip Lowe, Governor of the RBA: "Inflation has increased in Australia, but it remains lower than in many other countries; in underlying terms, inflation is 2.6 per cent and in headline terms it is 3.5 per cent. Higher prices for petrol and other commodities will result in a further lift in inflation over coming quarters, with an updated set of forecasts to be published in May. The main sources of uncertainty relate to the speed of resolution of the various supply-side issues, developments in global energy markets and the evolution of overall labour costs. Financial conditions in Australia continue to be highly accommodative. Interest rates remain at a very low level, although fixed mortgage rates for new loans have risen recently. The Australian dollar exchange rate has appreciated due to the higher commodity prices and, in TWI terms, is around the level of a year ago. Housing prices have risen strongly over the past year, although some housing markets have eased recently. With interest rates at historically low levels, it is important that lending standards are maintained and that borrowers have adequate buffers. The Board's policies during the pandemic have supported progress towards the objectives of full employment and inflation consistent with the target. The Board has wanted to see actual evidence that inflation is sustainably within the 2 to 3 per cent target range before it increases interest rates. Inflation has picked up and a further increase is expected, but growth in labour costs has been below rates that are likely to be consistent with inflation being sustainably at target. Over coming months, important additional evidence will be available to the Board on both inflation and the evolution of labor costs. The Board will assess this and other incoming information as its sets policy to support full employment in Australia and inflation outcomes consistent with the target." It is important to note the change in rhetoric with the governor mentioning that inflation could head higher with no mention of when the RBA expects to hike rates. For the full statement, visit the official RBA website: www.rba.gov.au The CAPITALCOM:AUDUSD broke out of key resistance with the price increasing likely to roll over back to pre release price.
TVC:AU10YLong
by GrizzlyBearBee
10 YEAR YIELD GOING HIGHER MOST LIKELYIn the current high inflation environment we are in and with the Rus-Ukr war pushing energy and other commodity prices higher and higher, we can all agree yields on bonds have every right to move way higher then we have been seeing the past few years. The peak of the 'Tamper-Tantrums' back in November 2018 (Seen with black arrow) we can see the 10 year yield was higher than current levels. This was also when the fed wasn't that eager to release a 9 trillion dollar balance sheet back to market and when inflation levels were no where near what we are seeing (and feeling...) today. I do think we could be seeing the 10Y yield trying those levels (hit a little over 3% during those times) in the upcoming weeks. I do think the market will be ahead of the Fed, and push it to move higher faster. We may even break the 3% level.. especially if there is a hyper-inflation panic. Faster Bond movements could drag the market down (especially high flyers, tech stocks, etc) as e have seen in the recent past. We had a 2y/10y inversion last week which could be a leading recession indicator. In any case, be sure it's the Bond markets that will be setting the tone. Trade with caution :)
TVC:US10YLong
by LEO_IAMNOTUNCERTAIN_55555
The US10 YR Yield is Getting Very Close to it's Projected TargetLast year I uploaded a series of charts tracking the US10 Year Yield from it's Bottom to where it is now the US10 Year Yield so far has reacted exactly how it was planned and it dragged the DXY up with it; However, the 10 Year Yield is now reaching very close towards it' target and from there we may see a Bearish Reaction that could eventually be followed up by a retrace back down to around the levels of 1.12% which may in essence also signal a reversal in the DXY and a short rally in the riskier assets. I may also consider going in on the TLT soon too as that is also getting down near levels of projected interest.
TVC:US10YShort
by RizeSenpai
Will the Bond Market Continue to Sell Off??Bonds have reached a relative high at 123'01 to the tick then promptly rejected this level. A red triangle on the KRI confirmed resistance and we headed straight back down to through the 122 handle to finally find support at 121'28. We are currently seeing some support here, confirmed by a green triangle on the KRI. However the Kovach OBV has taken a steep dive south suggesting the bear rout is about to pick up again. If so, the next target is 121'00, then 120'14. If we are wrong, we must break through 123'01 before we can consider higher levels.
CBOT:ZN1!
by quantguy
Unchartered Territory-TNXAnyone who thinks they know for sure what's going to happen in this market should follow price action very, very closely. TNX just closed the month of March by very bullishly crossing the monthly cloud. Since the 1980's interest rates have been in a down trend. TNX could have crossed the monthly cloud bullishly on a couple of occasions but it never had the power to do what it did this month. What happens now? Here are the times TNX could have had the strength to cross the monthly cloud bullishly but it got rejected: Here is this months action: Looking at it from a different angle...below is the monthly chart of ZN. When interest rates rise, ZN futures goes down. Does a 6% Interest Rate sound crazy? Don't break that neckline!
TVC:TNXLong
by Vixtine
7
My bet against Yields and for the Stock MarketsThe US government bonds are currently on everyone's lips. Wherever you listen, you hear the word recession and people sometimes talk about the "big crash". This is due to the currently enormously rising interest rate curve. However, I think that we saw our peak in 10-year government bonds yesterday and I think that the 10-year yield curve will now start falling. This is all of a technical nature and should now lead to a sell off to the 61.8% Fibonacci level which should bring us back to the 1% levels. This is enormously good for the stock markets and especially for technology stocks. I think that we can still expect a big surprise from the central bank and that exactly what very few expect will happen. I'm betting against government bonds and for that I'm betting everything on growth stocks over the next 2 years. This is no financial advice.
TVC:US10YShort
by RT_Trading_