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Fed v.s Market: the fight may last for a whileAfter the Non-farm payroll event last week, which saw 236,000 jobs added through March, it is clear that the job market is still creating many jobs compared to pre-COVID levels. However, the market has been experiencing some short-squeezing from yields to the dollar. The reason for this short-squeezing can be attributed to the mispricing between Fed fund futures, which are giving a dovish perspective beyond May, and the Fed's view from its last meeting, which hinted at least one more rate hike. However, with two holidays in a row right at NFP last week, the short-squeezing action was impaired after the news, and the market quickly came back to price in the CPI tomorrow, as well as retail sales on Friday. The Fed fund futures dropped a few percentage points for a 0.25% chance of a rate hike in May and the dollar also retreated. While tomorrow's CPI's headline may slow down and be close to the market forecast with a 0.1-0.2% m/m gain due to some correction from the energy price for the period back then, the service and rental costs are back, and they will continue to haunt the core CPI, which may print a 0.4-0.5% m/m gain for last month. From this perspective, the market is likely to price in the headline instead of the core, as the media would cover that number more, and it may continue to extend the mispricing between the Fed fund rates and the reality that the Fed may continue to have at least one more hike provided a still-hot labor market and stubborn inflation. Another reason for expanding the mispricing is retail sales on Friday, which may not meet expectations and give the market another reason to beg for Fed to ease. However, it is unlikely that the Fed will reduce that soon. Remember how eagerly people talked about a 0.5% rate hike for the last meeting before the banking crisis? It has only been a few weeks since the latest news on the bank, and things are calm, and the Fed is confident in containing liquidity issues. So things will be back on track, along with Fed's hiking. The more mismatching there is between the market's expectations and reality, which the Fed may continue to do, the more significant the opportunity when going against the crowd. In short, the yield will gradually come back, provided that the banking crisis is over and there are no more or fewer deposit drains. Then, the other assets follow the yields then. 
OANDA:XAUUSD
by DatTong
US10Y: Rising short term inside its Channel DownThe US10Y is trading inside a Channel Down on the 1D timeframe with the 1D technicals neutral (RSI = 46.172, MACD = -0.046, ADX = 31.478). With the 1D RSI coming off an accumulation that we've seen on the December and January bottoms, we expect the price to rise and approach at least the 0.618 Fibonacci. Our TP = 3.750. ## If you like our free content follow our profile to get more daily ideas. ## ## Comments and likes are greatly appreciated. ##
TVC:US10YLong
by InvestingScope
7
#UK 10Y Yield tests it 200-day maYet another example of a market mean reverting to its long term 200-day ma at 3.13 and attempting to stabilise. We have seen SVB collapse and UBS take over Credit Suisse and during this market turmoil, as at other times, we are likely to see markets mean revert to their long term moving averages - particular attention should be paid to the 200 and 55 week moving averages. Disclaimer: The information posted on Trading View is for informative purposes and is not intended to constitute advice in any form, including but not limited to investment, accounting, tax, legal or regulatory advice. The information therefore has no regard to the specific investment objectives, financial situation or particular needs of any specific recipient. Opinions expressed are our current opinions as of the date appearing on Trading View only. All illustrations, forecasts or hypothetical data are for illustrative purposes only. The Society of Technical Analysts Ltd does not make representation that the information provided is appropriate for use in all jurisdictions or by all Investors or other potential Investors. Parties are therefore responsible for compliance with applicable local laws and regulations. The Society of Technical Analysts will not be held liable for any loss or damage resulting directly or indirectly from the use of any information on this site.
TVC:GB10Y
by The_STA
$TNX is weakening, no longer holder better vs short term Yields$TNX has held better than short term #yields but could this be changing now? - The 2yr & 1Yr are holding. - Of course, it's early in the trading day so we'll see tomorrow morning how things go. - In reference to the post last week on #yield in 2008, we need to keep an eye on TOPS in these #bond yields. It took 1 year at that time before there was a lower high. IMO will happen MUCH FASTER. Perhaps 6 months tops, no pun intended. :) #stocks #cryptotrading #rates #interestrates
TVC:TNX
by ROYAL_OAK_INC
Dollar & VIX ripping, Yields cratering, Stocks fallingGood Morning! We've been mostly cash when it comes to #stocks. Been defensive as we have #GOLD #SILVER #BCH #BTC (#crypto #altcoins in personal) some $VIX & some bigger VALUE names, added some more today $AMGN $VZ as examples. We've reduced the exposure as the direction seems south but anything can happen. FEAR is the word. #Dollar ripping again & bond buying. $DXY looks good & bounced off of support. Look @ yields CRATERING again. 1Yr & 2Yr #yields COLLAPSING! 10Yr HOLDING MAJOR SUPPORT & back at level it was 2 days ago. We noticed something some time ago & will post soon. $VIX is trading in a new range now & closing in on the TOP part of range. 2 things can happen here. Either we rip through, likely causing a COLLAPSE in #stockmarket OR IT pulls back to the 23ish range and keep in this new range & fear eventually subsides.
TVC:DXY
by ROYAL_OAK_INC
$TNX Bouncing nicely as are shorter maturity YieldsWas kind of expected to get some bounce from #Bond #Yields. The last two days, especially yesterday, was RARE in yield price action. It happens but it's rare. The buys could have been investors trying to take advantage of higher rates being that they are "expecting" the Fed Reserve to lower rates. We mentioned that most yields, when we posted, were at or close to support levels. So the bounce we are getting today is not unexpected. Furthermore, the gap from two days ago attracted and it is filled today. $TNX was also oversold. Yields from here are tough to gauge but likely go a bit higher.
TVC:TNX
by ROYAL_OAK_INC
Biggest Drop since 2008 - Right After our Post 🙄Good that I always TRUST my Charts: US Government Bonds 10 YR Yield has dropped 'nicely' since my last post, which was 'against the stream' since when i posted it Powell was being extra-Hawkish and situation was different. News: The yield on the 2-year Treasury note fell sharply on Friday as the shutdown of Silicon Valley Bank sparked a flight to safer assets such as government bonds. The yield shed at least 46 basis points over a two-day period, a sudden decline not seen since September 2008 , when the markets were in the throes of the global financial crisis. Perhaps by no coincidence, the flight to bond safety this week was caused by the biggest bank failure since the financial crisis. These were supposed to be 'Good news', rates could ease and markets (and crypto) could do better but unfortunately it all happened for the wrong reasons: Some Banks going bust. Better check my other posts today. Everything changes FAST so watch out for the CPI tomorrow: If inflation is better the Feds are saved...if inflation persists we could ALL be in DEEP trouble. One Love, The always optimistic Professor
TVC:US10YShort
by FX_Professor
So... Recession Confirmed? With oil breaking bullish support, it's safe to say that demand has been cratering around the world. As Jeff Snider has discussed for months now, if the supply constraints on oil aren't driving oil higher, then there must be a serious demand problem. Overheated economy? I think not. Add to that Gold up and Yields down and that means low growth + low inflation. Also not good. So what's the trade? Well, I think we might be at the start of what Alex Gurevich has called the mother of all bull markets in bonds. Some of these options on bonds could pay out 10x to 20x (i.e., eurodollar futures, SHY, TLT, etc). Interesting times to live in.
NYMEX:CL1!Long
by sacredprofit
Side-step a potential storm!Just when we thought the hawkish narrative was pretty much priced in, SVB’s fallout basically threw a spanner into the hiking cycle. You’ve probably read quite a lot about the whole SVB debacle since Thursday’s trading session so we won’t harp on that. We instead want to turn your attention to two other markets that moved significantly since the SVB episode. Interest Rates & Gold. A sharp repricing has occurred in the expected rate path as markets digest the onslaught of SVB-related events. As a result, we saw the probability of a 50bps point hike jump from 30% to 80% and then back down to 20% as of today. Additionally, further rate hikes have also been priced out indicating market’s expectations of a more cautious Fed. Most importantly, the implied aggressive rate cuts starting from the end of 2023 caught our eyes here. As a reminder, the last time the fed paused and then cut rates, Gold responded with a 60% rally. As the potentially lower terminal rate and faster pace of rate cuts narrative begin to pick up momentum, we think Gold deserves more attention now than ever. The next FOMC meeting is only 10 days away. From there, we will get a sense of what the Fed thinks of the current situation. If they start to show signs of retreat from their hawkish stance, we believe it will be a catalyst for this trade. Another point of worry is economic data still coming in hot, at least for now. For those not keeping count, Non-Farm Payrolls numbers have beaten estimates to the upside for the past 11 months as the economy remains unusually strong. With the next set of CPI numbers coming out this Tuesday, a hot print could drive inflation worries further. If the Fed shows signs of easing on the hawkish narrative while Inflation numbers continue to be hotter than expected, higher Inflation expectations could once again drive investors into inflation-protecting assets like Gold. Key volatility gauges have pointed higher over the past few days and major indexes have edged closer to key price and technical levels. Given these, volatility is likely to compound from here as Commodity Trading Advisors (CTAs) potentially flip sides and funds rotate out of the banking sector. In such uncertain times Gold’s status as a safe haven asset could attract flows as investors sidestep the market turbulence. Looking at the price action, Gold still trades well clear of the 500 Day EMA mark which has marked the support for the price action and well clear of the 1800 physiological level. RSI is still middle of the road indicating that there is still room for Gold to run higher. Gold’s relationship with interest rates and position as an inflation-hedge/safe haven asset could very well position it for further upside from here. For now, we think it provides enough upside to sidestep the potentially volatile times ahead. We set our stops near the previous level of support and the 0.618 Fib level, 1755, and our take profit levels at 2065. Each 0.1-point increment in COMEX Gold future is equal to 10 USD. The charts above were generated using CME’s Real-Time data available on TradingView. Inspirante Trading Solutions is subscribed to both TradingView Premium and CME Real-time Market Data which allows us to identify trading set-ups in real-time and express our market opinions. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com 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. A full version of the disclaimer is available in our profile description. Reference: www.cmegroup.com www.cmegroup.com
COMEX:GC1!Long
by inspirante
1
SIVB Meltdown- Canary in the Coal mind?Today we saw a systemic risk in the financial sector. The regional banks were hit extremally hard and as a result the Major banks saw sell side liquidation. Where there's one cockroach, there's usually another. Risk in the banking sector is the worst type of risk investors can ask for. Credit liquidity crisis is not something to mess around with. SIVB looks like its in serious trouble potentially being exposed to fraudulent crypto loans that will likely default as well as failed speculative startups in the tech and health care space.
S
by Trading-Capital
Japanese have been selling bonds, have Yields peaked for now?One of the reasons US Treasuries, and other bonds, have been selling off is the dumping by Japanese investors. All duration #YIELDS have done well but more so the shorter term. The Inverted Yield Curve has widened over the last few months but has been significantly lately. However, today we see the 1 & 10Yr ($TNX) selling off but the 2 Yr is CRATERING! Interesting. Also interesting is that volume has been waning for investment grade and high yield bonds. Liquidity could be an issue later on if this continues.
TVC:US02Y
by ROYAL_OAK_INC
United States 10-Year Bond Yield - AT RESISTANCE 🤨👎Massive level of resistance has played out and Stocks could power higher as Treasury yields and dollar might ease further. 4,22% has been a Major Support/Resistance level (S/R as you can see on the chart) and the prices down have dropped even lower, below the psychological 4% What does that mean? When US government bond yields are on resistance, meaning they have reached a point where they are likely to reverse direction, it can have a significant impact on various aspects of the economy and financial markets. One of the most immediate effects could be on the stock market. Higher bond yields could lead to a sell-off in equities as investors may shift their money from riskier assets to safer ones like bonds. This could result in a temporary decline in the stock market and a potential increase in market volatility. The impact on the broader economy is more nuanced. Higher bond yields can lead to higher borrowing costs for businesses and consumers, which can slow down economic growth. However, if the bond yields are rising due to a strong economic outlook, it could be a sign of healthy economic expansion, which could offset the negative impact of higher borrowing costs. The Federal Reserve's monetary policy could also be affected by rising bond yields. If the Fed believes that rising bond yields could lead to an economic slowdown, it may adjust its policy by lowering interest rates or increasing its asset purchases to keep borrowing costs low and support economic growth. In summary, when US government bond yields are on resistance, it could have a significant impact on various aspects of the economy and financial markets. It could result in a temporary decline in the stock market, higher borrowing costs for businesses and consumers, and potential adjustments to the Federal Reserve's monetary policy. What's next? 🆘 The Feds are lots of data to watch out for: 📌 Fed Chair Powell speaks on Tuesday/Wednesday 📌 JOLTs job data on Wednesday 📌 Fed Beige Book on Wednesday 📌 Fed’s Barr speaks on Thursday 📌 February jobs report on Friday 📌 Final week of Q4 earnings Hopefully, this is a good sign to see a further rebound in the markets and a more dovish Federal Reserve.. unless they are aiming for chaos in which case they intend to raise rates over the 6% One Love, The FXPROFESSOR
TVC:US10YShort
by FX_Professor
4
Interest rates - Bond yields... Are they really going higher?Recently the market's expectation for the Fed Funds Rate peaking around 5% and then coming down at the end of Q4 2023 changed, with the market now seeing rates going to 5.5%. Many investors/analysts are discussing bond yields heading to 6% and staying higher for longer. However, is that going to happen? What is sentiment telling us right now? What is data indicating? If rates keep going up, what does this mean for other risk assets? Sentiment right now seems to be quite bullish on yields (bearish on bonds). We are probably near a short-term top for bond yields, and I think this Fed hike may be the last one. The reason is that in Q3-Q4, we started seeing an actual economic deceleration, and inflation dropped significantly. In January, we had some weird data that might have to do with seasonality and adjustments on how inflation is calculated. The critical thing to note here is that rising interest rates act with long and variable lags and that the drop in inflation since July 2022 was caused by factors irrelevant to interest rate hikes. So let's take things from the beginning... Since Covid hit, we have seen tectonic shifts in markets. Many things changed in the global economy, which was already in bad shape. It's unlikely that inflation will be contained for a long time, given that we are at the end of the debt cycle, the end of globalization, we are in a war cycle, we are at war against the climate, and the labor market is changing rapidly. Therefore, bonds will likely substantially underperform inflation in the next decade. In 2020 and 2021, fiscal policy was heavily used over monetary policy, and we still feel the effects of those policies and the aftereffects of Covid. US monetary policy started shifting in March 2022, when the Fed began hiking rates and Quantitative tightening in July. Hence the changes in monetary policy couldn't have affected markets, as it takes more than 12 months for changes like this to have any effect. Of course, we also had the Russian invasion, which caused a commodity spike, and we had Europe and the US spending a lot on Ukraine and war equipment broadly. Then the relationship between US and China started worsening, while China was under lockdown and only started reopening in December - January. The global economy is in terrible shape and will get into a steep recession eventually. Some data make it look strong at times, but it isn't. I think the Fed is looking and acting in the worst possible way, and it's trapped. At the moment, markets are afloat mainly because of human ingenuity, past fiscal and monetary stimulus, and the actions of Central banks like the BoJ, HKMA, and PBoC, as well as the BoE and ECB having some form of QE going on, while the Fed & US treasury is increasing market liquidity by draining the TGA, creating T-bills and bank reserves. It's unclear what will happen when all the interest rate hikes start affecting the economy, but Central banks and Governments will resume supporting markets and the economy. There are several tricks they can implement before they start cutting rates or continuing QE, or doing Yield Curve Control, but ultimately they will get to that point. Now finally, let's get to the charts! TLT / UB look like they are bottoming here. Swept the lows but closed slightly above them. Double top and significant gaps are higher, so that's where I think it's headed. I don't want to say that we will go massively lower, but for now, I treat this as a range, and I don't want to let my view that inflation will come down affect me. My target is the range highs and nothing more. SHY looks like it capitulated and filled a double gap (partially) to the downside. That double gap occurred near the bottom, but now we have a massive double gap open to the upside, telling me it could go higher. Both that and TLT tell me yields down (bonds up)! Short-term yields have been increasing, with US 2y getting near 5%. Maybe that's the psychological level everyone thinks will break easily, but it doesn't. The majority is eyeing 6%. Perhaps we do a slight break above 5% on the 2y, then fall quickly below it. The average bond yield (random average) is at 4.5%, it also made a new high, but this could be a trap. I am not seeing much strength here. The 10y, which I used as the base chart for today, reaches a critical level where the major correction to the downside began and has found some resistance there. Finally, I wanted to discuss a few currencies and some overall observations. EURUSD and GBP are at support but looking weak. I can see how they could have one last dip and then higher, but I don't want to see them go much lower from here. USDJPY and USDCNH are trading higher, with USDJPY being 10% lower from where it peaked. The interest rate differential was the same as now or lower, so something is happening here. Maybe rates are peaking? Maybe the interventions from CBs and Govs are working? Stocks are also much higher than back then, and they don't look like they will go down. Both pairs seem to be back in an uptrend which seems close to peaking. Based on how their charts look, I don't think the USD will keep strengthening, which is telling me that something big has shifted in markets, which is bullish risk assets, and potentially bearish on bonds yields.
TVC:US10YShort
by BitcoinMacro
1