Bullish yields = Another bear market incoming?About to take out double top
Strong oil = Strong CPI = Higher yields to tame inflation
Strong case to further hikes
Bad for equities and could mark beginning of another bear maket
Government bonds
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Table of Contents
What Is a Bond?
Issuers
How Bonds Work
Characteristics
Categories
Varieties
How Bonds Are Priced
Bond Prices and Interest Rates
Yield-to-Maturity (YTM)
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INVESTING
Bond: Financial Meaning With Examples and How They Are Priced
By JASON FERNANDO Updated March 09, 2023
Reviewed by CHIP STAPLETON
Fact checked by KATHARINE BEER
What Is a Bond?
A bond is a fixed-income instrument that represents a loan made by an investor to a borrower (typically corporate or governmental). A bond could be thought of as an I.O.U. between the lender and borrower that includes the details of the loan and its payments. Bonds are used by companies, municipalities, states, and sovereign governments to finance projects and operations. Owners of bonds are debtholders, or creditors, of the issuer.
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Bunds break down! The German Bund has finally broken support in the bearish channel and targets the 127% extension of the March 2023 impulsive move higher. Following the ECB last week, and ahead of the FOMC this week, we have yields rallying in the USA with the 10yr note falling alongside the bunds as traders are nervous ahead of the decision. RSI in the Bunds are pointing lower confirming the bearishness.
US02Y bullish move stopped by a fibSharing how Fib extension can catch tops and bottoms / support and resistance.
Here we have the 2yr bond yield with the 3 pivot points (marked by blue price notes) for the fib extension at Mar 24 low, Mar 31 high and Apr 05 low.
Last nights .5-ish move was suppressed by the Fib 3 boundary.
From an elliott wave perspective, there are so many 1-2 waves from the May 04 low...it would seem, if this is a correct analysis, the 2yr is headed higher...much much higher. I believe this is the 5th wave just starting and to confirm, we'll have to watch for a significant break(IE a few green non-retracing candles to be the confirmation - something like the push from 13-sep-2022 to 26-sep-2022)
two possibilities for the crazy trainjust an update on my last chart of this. last time we were at the bottom trendline, now we are at the top.
10year yield US 10y yield has broken out of a 40 year old trend line.
This will be big. Whatever worked for last 40 years will not work going forward.
This is just a trend line. Not financial advice.
US10Y and DXY show no signs of stopping for the next 2 weeksThe DXY and 10Y are the cryptonite for stocks and crypto and show no hesitation in moving up. This trend line has not been broken, scary thing is the break through levels of where these can hit. DXY at 114$ has been catastrophic to everything and with inflation data we could be headed there.
US 10Y TREASURY: time for relaxation, or maybe not?The US inflation figures were published during the previous week, which showed that it is not going to be an easy task for the Fed to bring it back to its 2% target. At the same time, oil was traded above $90/barrel with some analysts’ prediction that it might easily reach the level of $100 till the end of this year. Taking current circumstances into account, the market was able only to move in one direction – bringing 10Y Treasury yields back toward the 4.30% level, where the benchmark is finishing the week.
Currently there is a bit of a tricky moment on the charts. Namely, 4.3% could be treated as sort of the resistance level for 10Y Treasury yields. But, taking into account that the FOMC meeting is scheduled for the week ahead, surprises might be possible in terms of a break of 4.3% level. However, if everything stays as anticipated by the market, then yields might come a bit back down to 4.2% levels.
inflation & yieldsThe Us 10 Year yield is one of the most important yields to follow.
It greatly impacts long term investment decisions in a vast array of markets; stocks, bonds, real estate.
A clear technical breakout is being observed & this could mean inflation is becoming entrenched.
Yields have a tendency to rally in parabolic fashion. if this breakout holds we can likely expect higher rates.
2 year yield - breakoutThe yield market is going absolutely bonkers tonight in the futures.
What is the bond market telling us?
likely inflation is entrenched. If the 2 year yield closes at or above the Fed Fund Rate before we hear from Powell expect the fed to do a surprise rate hike or remain extremely hawkish.
This will no be good for stocks if this is the case.
Dark times are coming...
- TVC:US10Y is showing significant strength on all major timeframes.
- The EMA's on the monthly timeframe broke bullish after 12,000 days (Last seen 1962).
- If the US10YR breaks the 50% price retracement, we could see between 7.25% - 15%. (Last seen 1981)
The markets are in a scary place right now. This bear market may be extended due to many factors were dealing with in 2023 (War, Virus, Inflation, Rising Interest Rates, Upcoming election, etc...).
Maybe a crash is what's needed to reset all of this chaos?
US10Y divergence suggesting "Sucker Rally" aheadDuring market crashes yields plummet along with equities in flight for safety and also they tend to lead in the decline. But here as we see 10-year yield divergence is suggesting equities can retest ATH once more before the crash. This also aligns with previous market behavior where equities rally on rate pause leading to recession - a "Sucker Rally" essentially.
Yields Spread Market Crash AstrologyYield spreads tighten and also invert leading into a recession and it is only once they start to de-invert that any sizable decline begins once all the durations have been squeezed and there is nowhere else to run/hide for market participants. The 10Y-03M curve is of particular interest compared to 10Y-02Y, which almost always leads to a crash once that cuts above 0.
Current widened spreads suggest there is still time for any black swan event to realize. I would expect long duration to rally in the next 2-3 months to narrow the spread around ~5% range, this can occur with help from TGA refill that's occurring until the end of September. Once at the end of the fall, I think we will see trouble brewing in markets from high rates and short liquidity.
Net-net, equities, and all risk assets can float around until late August/September before any major decline can transpire.
US10Y potential tumble to the downsidesince price of GOLD has reached its lower price for the month will cause people to lose faith on US10Y and soon will divert to put their trust back on gold.
Continuation Head & ShoulderIndia govt bond yields has formed a continuation head and shoulder pattern
Are the yield going to sub-7%
