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Yields

Yield explosionThe yield curve is still in a bear market. Downward trending resistance at 3.1% Once that is broken, it could easily go up to 7% which will act as a magnet due to it being a historical support line (1973-1992) and resistance (1992-2000). This would be disastrous for the US government as interest on debt would rapidly rise. More fundamental reasons of why the yield curve would go up is off course the US debt which is absurdly high. There is no reason for lenders to keep lending at these low yields. Russia stopped doing it and sold all US treasuries, China stopped doing it and now that the babyboomers are retiring they are stopping as a buyer as well. Soon only the fed will be a buyer of these bonds. Long term up is the only way to go for yields and the road is open until 7%. This would cause a panic since the US will have it very difficult to service the debt without creating more bonds, enlarging the supply. Very good news for gold (65% of the monetary reserve of the US) which could be doing extremely well just as it did in the 1970's
TVC:TNX
by fatjohn
USDRUB fundamentals and bond spread.Russian GDP annual growth rate is expected to come out February 1 with an increase of 0,70% from 1,50% to 2,20% while GDP in April is expected to fall into a 2,10% growth rate, Agricultural GDP is almost at 2017 levels, and will likely contribute to a stronger ruble. Manufacturing and construction GDP is also inching for a strong growth rate this year. Exports is at 2013 levels and have increased from January 2018 to November 2018 with 20,44%. Increases in export are expected to hold its momentum and increase throughout 2019, giving Russia a positive trade surplus. Higher oil prices is also contributing to the GDP growth. Consumer confidence is at -17.. While consumer spending is almost at its highest. Disposable income is at 0,10% and is expected to rise by 0,40% this year. Retail sales advanced 2,60% in 2018 compared with 1,30% increase in 2017. Retail sales is expected to rise modestly in 2019. Wages and living wages have increased in 2018. Unemployment rate is at historically lows since mid 2018. Overall, i see Ruble to gain this year against the Dollar. Holding shorts, and will increase position when/if break of 64,400, 62,750, and 61,000 if we reach that far :) i will be looking at hedge opportunities. Keep in mind that Russia is still a risky trade, with sanctions imposed from U.S. and Europe. So, the whole think could turn against me. But from the fundamental perspective, i see a bullish ruble. TradingView does not provide data from RU10YT. But if you can find the data, then compare it with US10YT and you would see a that spreads are narrowing between those. This could indicate more demand for the Russian 10-year bond as the yield is decreasing.
Short
by Fx-AlphaStrats
Gold shines with falling real yields This chart compares the real yield of 10 year Treasuries (bottom red) to XAUUSD (top). The real yield is the yield that a treasury buyer can expect to earn after inflation (nominal interest rate minus the inflation rate). At a glance there's visibly a strong negative correlation between real rates and the price of gold over time. Research by _Erb and Harvey showed a negative 82% correlation between real interest rates and gold prices from 1997 to 2012 (The Golden Dilemma). The real yield on long term treasuries was over 3% in 2000 and fell to a negative yield in 2012-2013. During this period of time the price of gold gained over 600%. And in reverse from 2012 the real yield increased approximately 1% to 2015, while the price of gold fell almost 40% during this time. Gold is relatively expensive when the real yield on treasuries is high, and relatively cheap when the real yield on treasuries is low. If an investor can gain a high real yield after inflation by holding a 'risk free' treasury, then the opportunity cost of holding gold is comparatively high. This makes gold relatively less attractive since gold pays neither dividend nor interest. Treasury investors lose money during negative interest rates (when inflation is greater than the nominal interest rate). This makes gold more attractive despite having no yield.
ULong
by dime
1
#FXinsights #TradingViewTOOLKIT Jan2019 \/Bonds /\Yields inFOCUSOriginal charts of these trades available at thinkorswimTOOLKIT.com with #TradingViewTOOKIT link US10YR LONG YIELDS Short @ 3.11 targeting Jan 2018 levels 2.55 NOW LONG BIAS from 2.55 with Key Levels, MarketDEPTH, and proMETRICS Momentum Metric Reversal (thin histogram line with "The Great Gatsby" Alert and Cloud Oscillator) [ ] Price Action Metric Reversal is when the histogram column reverses higher than 2 bars previous at peak high /low ZN1! SHORT 10yr NOTE Short 122'22'0 / 121'12'0 TARGET LEVELS 121'11'0 121'19'0 119'26'0 Price Action Reversal SHORT with "The Great Gatsby" Alert signal [ ] Momentum Metric Reversal (thin histogram line with "The Great Gatsby" Alert and Cloud Oscillator) [ ]
TVC:US10Y
by cisTRADING
Yield spreads say more selling aheadDuring several previous liquidity crisis in 2001,2008,2012, 2016 the investment grade corporate yields spread over treasuries hit 200+ bps ... right now at an average spread of 150 basis points, may suggest more pain ahead before capitulation is reached. In other words investment grade corporate bond yields may be still too low. Based on what we've seen during several previous liquidity crisis the cost of borrowing in corporate credit may need to rise another 50 basis points before this is over.
M
by dime
2
DE10Y / D1 : already showing signs of upward trending to come.We may show some short term demand on bonds because of equities volatility that I already expect. But I think anyway the EU bond market will remain under the bigger catalyst that this market will have to forecast new prices to settle to after ECB will pull out in december. My trading plan here is to remain bullish on the december future expiration and buying all interesting pullbacks. Hope this idea will inspire some of you ! Don't forget to hit the like/follow button if you feel like this post deserves it ;) That's the best way to support me and help pushing this content to other users. Kindly, Phil
TVC:DE10Y
by PRO_Indicators
Risk Off? Treasury yields set to drop.I posted a while back that the "rising rate" mantra may not be as sure as most think. To recap my view in brevity: Rates are up against a multi-decade long falling trend line, so it'll take more than a few sessions or weeks to overcome. I do believe that rates will be higher if you're looking out years or even decades, but shorter- to intermediate- term, the technical picture suggests rates are more likely to fall than rise. This chart has a lot going on, so let me explain. First, we appear to have formed a head and shoulders top, and Friday's close was essentially right on the neckline. If that neckline gets broken, the downside target for TNX is at 23.19 (2.319%). That level nestles in comfortably between the 61.8% and 78.6% retracement levels of the swing from the lows in September to the highs this year. Furthermore, there are two breakouts that remain untested. The first, or the "major" one, is around 26.00 (light red shaded area is the range). The second, or the "minor" one, lies just south of 25.00 (orange shaded area is range) and aligns with the aforementioned 61.8% retracement. Also worth pointing out is the bearish divergence in the RSI's trend (white line) marked with the yellow circle. The MACD also confirms this trajectory lower (the other yellow circle). In short, it looks like rates are headed back to 26.00 at a minimum, or more likely even further to the confluence of levels between 22.50-25.00. Rising rate environment? Sure doesn't look that way to me... (PS - I marked this as "short" because of the inverse relationship of bond prices and yields. So I'm bullish on bond prices, bearish on bond yields.)
TShort
by EchoAlphaBravo
Global-Review / May 28th : Waiting for VIX sellers to fail !Hope this idea will inspire some of you ! Don't forget to hit the like/follow button if you feel like this post deserves it ;) That's the best way to support me and help pushing this content to other users. If you want to see my chart more closely, click the share button below that video.. You will be able to have access to the chart used in that video. Indicators used in this forecast are PRO Sinewave BETA & PRO Momentum . You can check my indicators via my TradingView's Profile : @PRO_Indicators If you have questions about the topics discussed in that video post a comment with "@PRO_Indicators" handle. Kindly, Phil If you want to learn more about the basic rules to trade with my indicators here's the educational video link :
FX:SPX500
by PRO_Indicators
Silver - Price in Bottom of Range of the SLV, Is It Going Up?Silver - still a good entry point as the last couple days, and moving up from the bottom of its range. There is a whole, whole lot going on in the silver (and gold) story, but that's another article. For now I'd like to point out some action on the SLV 's chart. Silver has been bouncing in a tight range for much of 2018. Buying in the low $15's and selling on the way up has worked for a lot of this year. Betting against silver has worked too, but because of the accumulation of physical silver by several large entities and for other reasons, I don't believe price will stay this low much longer. Silver is being pushed lower by a stronger dollar, rising yields, and a host of other factors including competition with cryptocurrencies as a place for capital to go. But sentiment is rising for silver as a standby that, put bluntly, isn't gold and isn't subject to gold's issues; in addition to being recognized as a safe asset that has strong potential for appreciation as other things - markets, stocks, bonds, cryptos, presidents, deals, etc. - decide what they want to do. In the interest of simply disseminating a good entry point in the SLV and saving a more in-depth article for later this week, I'll cut this short and just point out the action in SLV's price - indicators and patterns alike are pointing to upward movement out of the bottom of the range. Please like, follow, and share, and maybe we can have fun and do great things together. Thanks again! See it on the site: holsturr.com/category/markets/charts/ ** For speculative and research purposes only - good luck! **
AMEX:SLVLong
by holsturr
Cup-&-Handle in the TBT- Interest Rates Going Higher, Tax Probs?Hold tight for this ride, there's a variety of reasons why bond prices will stagnate or fall. Interest rates should rise and be higher than they are now; "should" certainly isn't a reason for something to happen, but there are scant monetary policy maneuverings available for the Fed to keep interest rates low and by extension, prop the stock market up much longer. The TBT - ProShares' 2x Short 20+ Year Treasury Bond ETF - is an exchange-traded fund that seeks to double the inverse of the U.S. Treasury Bond index on the daily. When bonds do poorly from falling prices and/or higher yields, TBT rises and seeks to double the fall of long-term treasuries. There's a lot of reasons treasury bonds don't look so hot in the foreseeable future. Let's first be honest about the state of the economy - it's not doing as well as the Fed and economic experts might lead us to believe. 1. Data continues to show GDP is not as strong as predicted. GDP estimates are coming out crazy high. It's alarming to watch as the real numbers are revised lower and lower. 2. Input costs of all types are rising. Trade concerns and commodity shortages are leading to higher input costs in sectors across the board. 3. Unemployment numbers don't reflect reality. The unemployment numbers themselves might be valid, but the way they are calculated today is misleading. Experts claim that unemployment for college degree holders is below 2%. If the assessment is based on simply whether or not degree holders have a job, that might be true - but the numbers are false with regard to the reality of America's employment situation; an engineering graduate who is cooking pizzas for $8.50 an hour might have a job, but their pay grade is a fraction of what it would be if they could find employment in their field. Record-low unemployment numbers are no good when it means law school graduates are working as office receptionists and scientists are waiting tables, etc., and that's a more prevalent situation than what experts might lead us to believe. 4. The tax cuts aren't - and won't - help the middle- and working class as intended. The stated goals of Trump's tax cuts were to repatriate offshore money and bring corporate tax rates to competitive levels with countries like China. Those goals may be becoming realized, but the end result is not beneficial for the little guys. We've heard feel-good stories of employers tossing out $1,000 bonuses to employees, etc., but the reality is companies are using the favorable tax situation for stock buyback and M&A (merger and acquisitions) - and as a whole that benefits people at the top much more than professionals in the middle or workers at the bottom. So, the overarching situation is this: tax cuts aren't helping the everyday worker as much as experts might expect, and workers may be finding employment but they are underemployed and underpaid. Bottom line? Lower tax receipts with unfettered government spending will mean the U.S. Treasury will need to issue bonds. Bond prices will flounder and yields will rise - just as the Fed will presumably need to start printing money (QE 4?) - begging a couple questions: How are bondholders going to get paid? How is the strength of the dollar going to be maintained? Simply put, there are fundamental reasons for the price of the TBT ETF to climb higher. Similarly, there are technical reasons for the TBT to rise too - a cup-and-handle has printed in TBT's chart. This indicates higher prices in the future. A TBT trade is a little more involved than most, but could pay off with big returns on investment as the story plays out. Please like, follow, and share, and maybe we can have fun and do great things together. Thanks again! See it on the site: holsturr.com/category/markets/charts/ ** For speculative and research purposes - good luck! **
AMEX:TBTLong
by holsturr
Big spread between 5 y to 30 y treasuriesWatch this immense gap between the 5 y treasuries and the thirty years bonds. It will close sooner or later and I don´t expect the 5-y to fall or not far enough to close it. We´ll see probably a fast rise of yields in the 30- y bonds and this will cause much losses to the investors who are not aware of this. Sure, the indicators are signalling a correction in the near time. But with the FED prognosting more little steps of rising interest rates, a shorting of the QE and with positive signals coming from economy and labour market, I expect the yields going up in the long run.
F
by Luettis
mother of all charts US 10 yr yieldshigher dxy real rates spread increse => pressure on gold prices? bearish for across the board EM assets terrible news for etf managers china to start thinking about all the 1.3 bn usd worth of almost 0 yield US papers they hold imf and wb funding become more important => sharing policy making decissions with the west again .... for the sector, it means importance of the managed funds will increase. stock picking will be the name of the game again thanx god....
TVC:US10Y
by tncckn
Are stocks crashing? Watch the junk credit spread.With the increased volatility this year after such a long period without any significant declines has got some wondering if the market has peaked, or even about to crash. To get a better idea of what’s going on ‘under the hood’, we can study the high yield ‘junk credit’ market. High yield is also known as ‘junk credit’ for its higher risk of default and being rated below investment grade. This heightened risk means greater sensitivity to market conditions, and can serve as a 'canary in the coal mine'. The Merrill Lynch High Yield index has a yield of 6.36% at the moment. This is close to the 6% combined ‘yield’ of the S&P500 trailing earnings and dividend. When junk bond market is under stress and fear of default is rising, the yields ‘blow out’ or spike quickly. (We’re seeing this happen right now with concerns over TSLA credit). The chart shows how yields 'blew out' during times of stress. The orange line is the additional yield offered by the high yield index after subtracting the ‘risk free’ treasury rate. This ‘spread’ gives us a better idea of the risk premium demanded by junk credit investors. Currently the spread remains lower in around the range under 3.6%. The S&P500 index in blue is compared to the Merrill Lynch B grade corporate yield spread. At each of the previous peaks before the stock market crashed, there was a sudden spike in the credit spread. We even saw this spike in 2011 and 2015 when default fears increased. At the moment we’ve yet to see a similar jump in the high yield spread. Which would suggest that currently investors are not sensing any increasing risk of default (at least for now). A spread approaching the long term median or average range of 5% would give cause for alarm. The Merrill Lynch high yield spread chart is updated daily here: fred.stlouisfed.org The WSJ updates bond benchmarks daily here: www.wsj.com
F
by dime
1
Relative yield spread of currencies of usd-basket VS the usdThis line charts gives an idea how a currencies 10yr yield develop, relatively, vs the usd 10 yr yield. This goes only back to 2012-ish since no earlier data was available via the tickerdata. Trying to acquire new ticker data so we can make it complete up until the 90's. It should provide a clue where the USD is going short/medium term. Considering the output of this graph we can say that we are bullish usd with a possible target of at least 95 when rate hike happens next wednesday. Also its likely we will put a new 6-year high on the t-note when next ratehike happens. This is a major event.
TVC:DXY
by JTR78
1
Rate 'Normalization' This chart shows the ML investment grade corporate bond index yield vs the trailing SPX earnings yield (E/P ratio). From 2004-2007 the investment grade bond index and SPX earnings yield appear balanced near equal valuation. The red box from 2007 to 2009 marks the peak of the market to 2009 when the SPX sunk to recession lows. Note the following period of QE when the Fed fund policy of near zero lowered bond yields relative to equity earnings yield. Lately it appears that the SPX trailing E/P ratio and IG corporate bond yields appear to have finally 'normalized' and returned back to a range of equal valuation. However, investors can reasonably expect increased volatility ahead as the Fed begins this next phase of QT. The Fed forecasts a rise in the overnight lending rate and continued unloading of the balance sheet. This is likely to stress the equity and investment grade bond valuations which are currently 'priced to perfection'. Chart data: 'QUANDL:ML/USEY'-'QUANDL:MULTPL/SP500_EARNINGS_YIELD_MONTH'
M
by dime