Government bonds
Yield Curve touched the 0% - Will it continue up?US10Y-US02Y = Yield Curve.
The Yield Curve has predicted each of the previous market crashes.
The markets are crashing now but is it really the beginning of a bigger market crash?
OR are the markets just very volatile and have more last push up? Maybe yes for the US Markets.
In 2000, the market peak was when the yield curve was still negative (-0.3%).
In 2007, the market peak was when the yield curve was at 0.5%.
Is 2024 more like 2000 or 2007?
Long live "The Widowmaker" trade in JGB'sHistorically, shorting the 10 year JGB was called the widowmaker trade. Yields have trended down for decades in Japan and many a brave soul has tried to call the bottom in yields. Surely the recent move from 1.10% to .72% added a few more souls to the list. RIP
US 10Y TREASURY: September?During the previous week the 10Y US benchmark rates reached the lowest weekly level at 3.78%, and moved down from the support line at 4.2%. There are two major reasons for such a strong drop in Treasury yields. The first was on Wednesday when Fed Chair Powell noted a potential for a rate cut in the future period, which market perceives to be September`s FOMC meeting, and the second reason was surprisingly weak jobs data posted on Friday. The posted non-farm payrolls for July were significantly weaker from market expectations, reaching 114K, from 175K expected by the market. At the same time, the unemployment rate reached 4.3%, again higher from 4.1% estimated by the market. There is currently fear among investors that the US might slip into recession, however, there are also analysts who are noting that weak figures might be due to seasonal effects. Surprisingly weak jobs data led investors to increase odds for more than one rate cut during the course of this year. Also, there is currently 58% chances by market expectations, that the Fed will cut rates by 50 basis points.
After such a strong move in Treasury yields, it could be expected that the market will slowly digest the Friday`s data and adjust positions accordingly. In this sense, there is a probability that the yields would revert a bit to the upside, at least to the level of 3.9%. However, at this point levels around 4.0% are questionable.
Strategic Update: Preparing for the Bund's Takeoff Amidst EuropeI believe it's time for the Bund to take off from here with all this context from the entire European Union. I think the moment we see the Bund again at 141, with a TP zone around 135. The SL zone is again around 1/1 or 1.4, so we leave it room to breathe without putting too much pressure on it. Good luck to everyone, and let's start climbing from here urgently.
getting close to yield un-inversion 2Y is warming up for un-inversion , looks like more pain to come ahead for SPX
US10Y-US02Y1Y
I see an inverted head and shoulders pattern with RSI in a bullish trend.
5Y
RSI is in a bullish trend here as well.
Prediction: This inversion has reached a bottom and is going to start moving up.
10 Yr Yield Roadmap Oct 2023This should have profound implications if correct. On the upside, upper bound at 5.75% on the downside 2.5%
2 Year yields are weakeningWhich often signals a incoming recession.
The market leads the #FED who always raise and lower rates too late.
We have #Unemployment starting to tick up
Tight financial conditions, delinquencies on the rise.
So make hay over the next few months in memestocks, coins, bitcoin, alts, NVDA and so on.
But don't be left holding the hot potato when the music stops playings.
#Macro
#Meltup
#NVDA
#Nasdaq
#Stocks
#Bitcoin
#Altcoins
#Ethereum
#Pulsechain
US10Y - 7 Days Of Hell! When Will It End!?The FED has maintained their stance with 5.50% whilst BOE and several others have either lowered interest rates by .25 basis points or raised it.
Due to this, we have seen turmoil in the yield markets, -11%* decline within 7 days with more potential pain to come.
Current price action is trading below 2024's lows which could be a factor, if short-term trading to capture relief rallies back up to PD arrays.
3.783 is the next draw on liquidity.
Set a alert!
Monthly/Weekly buyside imbalance sellside inefficiency + order block located @ 3.644 - 3.535 is the next potential draw over the monthly basis
US 10 year Bond BoxesAll horizontal rectangles edges are Levels I will be watching for potential support and resistance action. Wouldn't say I am overly confident in the potential colored path of the boxes (red, cyan, yellow, pink and blue), but will provide step by step updates if anything significant pops up in a discretionary perspective.
The project should or might become more relevant with it's levels and zones, in time, if we get to see specific price action at the levels to indicate at least a slight sign of relevance.
First one to look out for is potential support at the red zone. Next to watch out for is a bullish toned cyan box perspective. If these fail, all bets are not off, we just let the price action dictate how the market feels inside the boxes and what it does when it escapes one.
Thinking outside of the box there might be another potential aspect for this project. What if the information is encrypted so that we don't get to see in advance what can really actually happen? How can we crack the code and why? Take a deep breath. Get A Touch of Zen. Look at the design without having thoughts about it and see what pops up and why and how. I like the O icon and the nen text location. Could be wrong though.
This one is similar to the EURUSD project. Linked.
UK Bond Steps and ForcesThis is my perspective on the forces that might apply on the UK 10Y Gilt. It can climb along the red rectangles to fall down to the big green or if the first red rejects it or the bottom arc attracts it, we might see support in that area. The vertical green is a special one where unusual or special circumstances and price action might occur, either higher volatility or sudden shift in sentiment.
Treat everything as potential support and resistance but also stepping stones in case the market follows the main scenario highlighted with the purple path arrow. The second one with checkmarks is secondary and depends on the activity at the first vertical long red in case we reach it.
Arcs are special forces of attraction and or repulsion. They can be broken depending on the momentum or type of activity. If the price slows down near them it can just slide through them, but if candlestick patterns of potential reversals and inflections are formed, I will take a good look at them when deciding how and if to approach the market or adjust/manage previously opened positions.
2 Year US Treasury Yield going down2 Year US Treasury Yield going down.
2 Year US Treasury Yield is always the first one to go down, few months before the Federal Reserve starts cutting rates.
Hold 2 Year US Treasuries to capitalize on it. (Yield down, Bond price up)
How I Stay Organized and Efficient During My Morning RoutineGood morning, traders! ☕️ As I gear up for the trading session, here's how I stay organized and efficient during my morning routine:
1️⃣ Plan the night before: I prep my trading station, review market news, and outline my trading goals before calling it a day. This sets a clear roadmap for the morning and reduces decision fatigue.
2️⃣ Start with a ritual: I kick-start my morning with a ritual that helps me get focused and energized. Whether it's meditation, visualization, exercise, or enjoying a cup of coffee/tea, this routine primes my mind for the challenges ahead.
3️⃣ Time blocking: I allocate specific time slots for key activities like fundamental and sentiment research, top down technical analysis, bias matrices, reviewing trade setups, and analyzing charts. This helps me stay on track, avoid distractions, and make the most of my pre-session hours.
4️⃣ Utilize checklists: I have a checklist that outlines essential tasks like reviewing economic data, assessing overnight market developments, rebalancing portfolio and updating my watchlist. If I have anything specific I need to focus on that session, I will take note too. This ensures I don't miss important steps or actions/tasks.
5️⃣ Stay organized digitally: I leverage technology tools like trading journals, note-taking apps, and calendar reminders to keep track of my trade ideas, record observations, and stay organized. This digital approach streamlines my workflow most of the time.
6️⃣ Focus on self-care: Prioritizing self-care is vital for optimal performance. I make sure to nourish my body with a healthy breakfast, hydrate adequately (especially important during the extended heat waves I experience where I live), and take short breaks to relax and recharge. A balanced mindset is key to success.
Finding an efficient morning routine is a personal journey. Experiment with different strategies, listen to your needs, and fine-tune your routine over time. Start your day right and set yourself up for trading success! 📈✨
T-notes Interest rate vs its future pricingIt's Inverse relation. An increasing interest rate will drive down the future's price.
US10Y : What/where to look The Fed say don't worry, things are looking good. There is 'no landing'. So lets be happy and continue as usual. The stocks are riding high. Jobs are plenty. Surely things are fine.
But the MARKET says other wise. Above is a simple way of looking at it. The market looks like it is scared shit and continue to buy up longer term bonds. If you look closely, 3.70% is the line separating heaven and hell. I am sitting back until it falls below, then it should be time to begin trading - unlike many who shorted way too early.
Why 3.70%? Look closely.
When something is going to break, it is usually the 'structure' - and the whole house of cards will fall down - in an instance :)
Good luck.
US01MY : An important chartThis chart is actually quite important. I take a look at it all the time.
It would be quite interesting when it starts to fall, ever so slightly at first, just below the EFFR.
We also need to understand which arrow is the BIGGER one. The green or the RED. This can easily answer which is the bigger POTENTIAL :)
Good luck.
P/S : DO not just believe what I say. Use your common sense.
If we look at the chart of most FX pairs, try not to look at the price action. Instead, look at the movement in volume. What I can see is that the MARKET is checking out if there are anymore BUYERs of risky assets. We can see it is running out of buyers, i.e. suckers. What lies ahead is easy to figure out.
US05Y - Retest on monthly bases then the biggest move ever.US05Y - Retest on monthly bases then the biggest move ever.
WHATS FLOWING: JGB YIELDS ARE UP! DECISION HOURS AWAY...AMEX:EWJ
TVC:NI225
TVC:JP02Y
TVC:JP10Y
TVC:JP30Y
FX_IDC:USDJPY
Segment: Interest Rates and JGB Yields
Interest rates are a crucial component of any economy, and the Bank of Japan's (BOJ) decisions on interest rates significantly impact global markets. JGB yields, in particular, serve as a critical indicator of the BOJ's monetary policy stance.
Market Expectations and Yield Movements:
When investors anticipate that the BOJ will raise interest rates, JGB yields typically rise. This is because higher future rates make current fixed-income securities less attractive, causing their prices to drop and yields to increase. Conversely, if the market expects the BOJ to maintain or lower rates, JGB yields tend to fall.
Yield Curve Control (YCC) Policy:
The BOJ uses Yield Curve Control to keep 10-year JGB yields around zero percent. If the BOJ allows yields to rise significantly, it may be preparing the market for a potential rate hike. This is a strategic move to manage inflation expectations and economic growth.
Inflation Expectations and Economic Indicators:
Rising JGB yields often correlate with higher inflation expectations and strong economic growth indicators such as robust industrial production and consumer spending. These factors suggest the economy might be overheating, prompting the BOJ to consider raising rates to prevent inflation from accelerating.
Investor Behavior and Global Influence:
The behavior of investors, both domestic and international, in the JGB market can signal expectations of rate changes. For instance, selling off JGBs in anticipation of higher rates drives yields up. Additionally, changes in global economic conditions, such as U.S. Federal Reserve rate hikes, can put upward pressure on JGB yields, indicating a potential BOJ rate hike.
Conclusion:
Today's episode has explored the complex interplay between JGB yields and the BOJ's interest rate decisions, providing insights into how these dynamics influence global markets.
Thank you for joining us on "What's Flowing." Stay tuned for more in-depth analyses and insights to help you navigate the financial markets. Don't forget to follow us on social media and join the conversation using the hashtag #WhatsFlowing. Until next time, I'm Moneymagnateash, wishing you successful trading!
The yield Curve almost Inverted again while Inflation soaredThe yield Curve almost Inverted again while Inflation soared. The worst thing for the risk assets like equity is full of participants who now need to face the Fed Fund Rate being hiked up by the Fed, which is currently under more pressure to increase Fed Fund Rate against higher Inflation which is 8.6% released this week. In contrast, the 2-year bond yield goes up this week.
That means three things:
1. The higher rate, the higher the "cost of money" - Bad things for Risk Assets
2. The spread of 10 yr treasury yield minus 2 yr treasury yield almost goes down to negative, which means short-term bond yield has potential higher than long-term. Once 10yr-2yr is negative, the inverted yield curve occurs.
3. the S&P 500's chart is now like 2008; the former is a Head & Shoulders, and the latter was a Double-TOP.
We are probably already in the worst stock market condition since the global financial crisis of 2008-2009. Whether the Fed will increase its rate or not, the stock market needs to pay back since the Fed printed a lot of money to "save" the market in early 2020. Conservatively, I won't say that the U.S. economy is plunging into a recession right now, but at least the stock market's value is into a contraction in advance. The exogenous factors like Ukraine War and China's lockdown are affecting the manufacturing of the USA. Inflation is now causing the consumption problem in such an environment, the U.S. Saving Rate is going down, and the PCE is. But if you look back in 2009 and 2019-2020, while the PCE was going down, the U.S. Saving Rate was going up, which means that the consumers in the U.S. still had spending power, unlike this time.
The big week for Central BanksWhile the July FOMC meeting is likely too soon to initiate the first cut, it isn't too early to began preparations for a rate reduction in September.
