Rate Inversion DisappearingInteresting how the market basically topped out in July around the same time bond traders started correcting the inversion on longer term bonds.
I said a few months ago that bond traders don't know what they're doing, lol. They were assuming rates were just gonna drop back down, now they've adjusted. Problem is, all of the bonds banks have bought in the past year are now under water.
Government bonds
US 30yr Yields - have we seen end of bond bull market?US 30yr bonds have seen a year's worth of action in the space of a month
From 1.90% to below 0.90% to back to 1.90%
In my opinion this reversal could be key for the bond bull market since the 1980s
If we get a close above 2.10% in 30yr yields I think we have seen a generational low this month
Just saying
Yield Curve Bottom (10s minus 2s) 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 a “long” short-dated bond position with a “short” long-dated bond position, while a flattener involves sale of short-term bonds and purchase of long-term bonds.
- CFA Institute
TNote (US10Y) entering target area, expecting a pullbackThe TNote (US 10 year yield) has entered its target area for this up movement from the bottom.
Resistance area is between 4.65% to 5%.
We are expecting a pullback below 4% for the next months.
Then the uptrend should resume towards 7%, possibly higher.
A break above 5% would invalidate this view.
US 10Y : "FED vs MARKETS" |...who will win? | (Part.II)The market is waiting for one of the most important events that could give a clear direction for the coming months. Today FOMC will release interest rate decision and the main players ( TVC:DXY , TVC:GOLD , VANTAGE:SP500 and FX:EURUSD ) will suffer the consequences. Even if we cannot rule out a 25bp increase, most analysts believe that a pause may be the right choice, also because the usual press conference is not scheduled for the next FOMC meeting, so the board could take advantage of this opportunity, to explain this "temporary change in direction" to the market.
So, what will happen today? No I have an objective answer to this question, unfortunately I am not a guru but a simple Trader, so today we will limit ourselves to following events.
Having said that, from a technical point of view, we were lucky in March because we widely predicted this increase in yield rates from 3.30% area to a new high (wave 5 for Elliottians) in Part. I of this Analysis. On weekly chart the trend is bullish and the next technical levels are around 4.46%, 4.61% and 4.7%, but today TVC:US10Y could take any direction.
US 10Y : "FED vs MARKETS" |...who will win? | (Part.I)
(Click on chart below)
Trade with care
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US 10Y TREASURY: digesting week is over?Markets spend the previous week digesting the latest information from the FOMC meeting regarding interest rates levels in the coming period, as well as FOMC economic projections for the next two years. It all created one quite a challenging week on US financial markets, as well as for the US Treasuries. The 10Y yields reached 4.5% immediately after the Fed Chair speech after the FOMC meeting on September 20th, however, during the previous week yields continued to surge further, reaching the highest weekly level at 4.67%. This could be treated as a sort of market overreaction, as yields soon returned to the level of 4.57% where they are finishing the week.
Yields continued to move within an overbought momentum for a second week in a row. This adds to the high probability that yields will further move toward the 4.5% levels which is more realistic to current economic prospectus and wording supported by the Fed. At this moment on charts, a 4.3% level could be the next target for 10Y yields, however, it might take some week or more until yields clearly reach this level.
There is a risk that $US10YR may further breach the 5% rate The US 10-YR Government Bond Yield is at risk of breaching further to as high as 5% which will then weign in more on the other safer haven yellow precious metal #Gold.
A rising yield for the past years since Covid erupted has brought pressure on both equity markets and Gold was never an excuse for this.
Why Gold shall keep falling? Real yields.dear fellows.
we believe gold prices are likely to keep falling, because unlike many analysts say, it is not a hedge against inflation, rather against real yields.
real yields have been rising, and thus, gold prices should fall.
in this video idea, we show how much divergence currently exists between these charts, and why in the next couple of weeks one can expect further losses in the gold price.
thank you for your attention.
best regards.
US20YR - The end is in sightBonds have been selling off at unprecedented rates for unprecedented lengths. The yield curve as started the un-invert indicating the recession is less than a year out.
The question remains if rates will remain "higher for longer" or if the flattening will include a swift fall in rates due to recessionary pressures, possibly leading to deflation.
If Steven Van Meters and Harry Dent 's predictions are (eventually) true then a play in TLT or TMF is warranted and would lead to gains in the multiples.
The DXY and Yields are Set up to Make a Midday ReversalThe DXY and the 30 Year Yield have been on the decline for most of the day but are now showing signs of reversing back up at the PCZ of a Bullish Bat and a Bullish Shark in the form of MACD Bullish Divergence and PPO Confirmation, respectively.
When these two start to rise again it is very likely that the QQQ start to continue down as it is trading at the PCZ of a Bearish Deep Crab and has formed Potential MACD Hidden Bearish Divergence and if it starts to go down it will also give us Bearish PPO Confirmation which from there may result in a fast move down to make a lower low.
All of this will likely be triggered by whatever the Fed has to say today.