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US Government Bonds 2 YR Yield

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US02Y trade ideas

Bullish rates reversal signals US dollar downside riskIf you want clues on directional risks for the US dollar, there are worse places to look than US 2-year Treasury note futures, shown in the left-hand pane of the chart. As one of the most liquid futures contracts globally, the price signals it provides can be very informative for broader markets, especially in the FX universe. Having tumbled most of October, implying higher US yields given the inverse relationship between the two, the price action this week looks potentially important. We saw the price take out long-running uptrend support on Wednesday before staging a dramatic bullish reversal on Thursday despite another hot US inflation report. The bounce off the 200-day moving average on the back of big volumes delivered not only a hammer candle but also took the price back above former uptrend support, delivering a bullish signal that suggests directional risks for yields may be skewing lower. You can see that in the right-hand pane with US 2-year bond yields hitting multi month highs on Thursday before reversing lower. But it’s the correlation analysis beneath the chart that I want you to focus on, looking at the strength of the relationship US 2-year yields have had with a variety of FX pairs over the past fortnight. USD/JPY has a score of 0.9 with USD/CNH not far behind at 0.89, signalling that where US 2-year yields have moved over the past two weeks, these pairs have almost always followed. EUR/USD, GBP/USD and AUD/USD have experienced similarly strong relationships over the same period with scores ranging from -0.88 to -0.96, the only difference being where yields have moved, they’ve usually done the opposite. The broader readthrough is that shorter-dated US yields have been driving US dollar direction recently, with rising rates fuelling dollar strength. But given the bullish signal from US 2-year Treasury note futures on Thursday, if we just saw the lows, it implies we may have seen the highs for US yields and the US dollar. Good luck! DS
TVC:US02YEducation
by FOREXcom
Very close to Yield Curve Inversion, AGAINAfter #InterestRates were cut people were expecting a furious wave of buying, this has not come into fruition. Recent events: 2Yr Yield rallied substantially. 10Yr #Yield bottomed when we called it, has not run as much as it's shorter term counterpart. We're close to inversion again! Colored areas = POTENTIAL Inverse Head & Shoulder = BOTTOM. Worth noting, TVC:TNX has a higher right shoulder. Further analysis: We are seeing a Negative Divergence on $DJI. Volume has been lessening as the days go by. TVC:RUT Small Caps are LOWER and trading in a tightening range.
TVC:US02Y
by ROYAL_OAK_INC
US02Y/US10Y Uninversion & RecessionsThe dynamics of the US Treasury yield curve, particularly the spread between the 2-year and 10-year yields (US02Y/US10Y), have long been studied as potential indicators of economic health. One phenomenon that garners significant attention is the inversion and subsequent uninversion of this yield curve. Lets delve into what these terms mean, their historical significance concerning recessions, and how investors might interpret these signals. What is the Yield Curve? The yield curve is a graphical representation showing the relationship between interest rates and the maturity of US Treasury securities. Typically, longer-term bonds have higher yields than shorter-term ones due to the risks associated with time, such as inflation and uncertainty. This normal upward-sloping curve reflects investor expectations of a growing economy. Yield Curve Inversion An inverted yield curve occurs when short-term interest rates exceed long-term rates. Specifically, when the yield on the 2-year Treasury note surpasses that of the 10-year Treasury bond, it suggests that investors expect lower interest rates in the future, often due to anticipated economic slowdown or recession. Historically, an inversion of the 2-year and 10-year yield curve has been a reliable predictor of upcoming recessions. Before the last several recessions, the yield curve inverted approximately 12 to 18 months prior. An inversion indicates that investors are seeking the safety of long-term bonds, driving their prices up and yields down, due to concerns about future economic conditions. Uninversion refers to the process where the inverted yield curve returns to a normal, upward-sloping shape. While an inversion is a warning sign, the uninversion phase can be even more critical. In many cases, recessions have followed shortly after the uninversion of the yield curve. This occurs as the Federal Reserve may begin cutting short-term interest rates in response to economic weakness, causing short-term yields to drop below long-term yields again. The uninversion can signal that monetary policy is shifting in response to economic stress, potentially validating the recessionary signals that the initial inversion suggested. The uninversion of the US 2-year/10-year yield curve is a critical event that has historically preceded economic recessions. By understanding this phenomenon and considering it alongside other economic indicators, investors can make more informed decisions. It's important to approach such signals with a comprehensive analysis and a prudent investment strategy that aligns with individual financial goals and risk tolerance.
TVC:US02Y
by kesor6
Bond markets pricing in a possible recessionary scenarioSpread between US 2 year yield and Fed Funds Rate is one of the key indidcators to watch out for the state of the economy. Fed Funds Rate is an overnight rate. Historically, before any recessionary scenarios the spread was seen moving to negative territory, during Middle East Crisis in 1989/1990, dotcom crisis in 2000/2001 and Credit crisis in 2008. Currently, the spread is at -1.67%, second lowest in history only to 2008 Credit crisis which was at -1.76%. This leads to a strong conclusion that the interest rate markets are possibly pricing in a recessionary scenario. Interesting times ahead...
TVC:US02Y
by scorpiomanoj
2
$US02Y $US10Y $GLD $IVOL $TLT - The Chart tells the futureHere we have a historical chart showing what will likely be obvious in 2 quarters. The chart bats 100% on the issue but not on the resolution. As you can see with LTCM and the Bhat crisis in the late 90s. This chart is great for signaling when to risk-off, it does not signal risk on, for that I use the CBOE:BXY . The way I play the waiting game after going risk off is exposure to AMEX:IVOL NASDAQ:IEF AMEX:GLD NASDAQ:TLT AMEX:UUP Cheers,
TVC:US02YLong
by rwoods187
*SMC* DXY correlated with US02Y Bonds As we can see on the daily tf, DXY has created Relative Equal High at 105.459 which translate to this level being a liquidity pool. We are likely to see 105.459 being taken out put where can it go? As we can see, above 105.459, the closer PDArray is the OrderBlock (made the 30 Apr) which confluate with the 75% of the Dealing Range and another buyside liquidity pool at 105.742. I dont expect DXY to trade above the mean threshold of the OrderBlock and if it touched I expect a strong reaction to the downside. Concerning the 02 year Bonds , the body has respected the OrderBlock (30 Apr) creating relative equal low which has been taken out (june 12). There is a ''crack'' in correlation right now between the DXY and the major Bonds of the US which leads me to think that there is a higher probability for the DXY to follow the Bound and drop lower. Fundamentally, Powell has been pointing out the progress that has been made (which could eventually lead to a cut of rates) However, the ''Dot Plot' ' surprised the market of a likely to only 1 cut this year instead of 2-3 rate cut priced-in, which could be the reason why DXY has been going higher the last couple of days.
TVC:US02Y
by ezod
2