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TLT 99.19 Target Achieved, New Pattern EmergingTechnical & Trade View TLT Ishares 20+ Year Treasury Bond ETF Trade View 99.19 Target Achieved, New Pattern Emerging Bias: Bullish Above Bearish below 97.90 Technicals Primary support is 97.90 Primary upside objective 101.13 Next pattern confirmation, acceptance above 99.50 Failure below 97.90 opens a test of 96.90 20 Day VWAP bullish, 5 Day VWAP bullish Today’s New York Cut Option Expiries: 1.1695-00 (414M), 1.1800 (319M) Institutional Insights According to analysts at Goldman Sachs ‘ Inflation miss-fueled bond rally likely overdone.Through the week, Fedcommentary has suggested a strong preference to slow down the pace of hiking. The inflation miss—October core CPI rose 0.27% month-over-month,below expectations, with services inflation slowing somewhat more than our economists’ projections—makes the step down at the upcoming FOMC meeting more likely, though Fed speakers appear to have been laying the groundwork fora slower pace irrespective of realized economic data. Markets repriced FOMCOIS beyond this December even more aggressively, both bringing the peak rate back below 5% and pricing additional easing beyond the (lowered) peak. While The details of the CPI report suggest there could be some downside risk to our current projected CPI path, we do not believe this materially changes the risks of hike cycle extension. Outside of unanticipated activity weakness (that is as yet not visible), we see a fundamental inconsistency in this price action. While a deepening of forward curve inversion is indeed appropriate when anticipating a recession, given the underlying strength of the economy, we believe the Fed will need to raise rates above current peak pricing for that to occur; a higher terminal rate, in turn, is more likely if inflation remains uncomfortably high. Either Combination—a higher terminal rate, but current levels of inversion, or the current terminal rate, but less deep inversion—argues for both higher end-2023 forward rates a higher average level of rates over the next two years. In case of the former, the cuts being priced offset the hikes earlier in the year, leaving net Fed pricing for 2023 one of the least aggressive among G10’
NASDAQ:TLT
by Tickmill
2
GOLD and Bond Yields. Are they starting to close the gap?Many may wonder what is the main driving force behind Gold's recent rally and a first answer would be the strong fall on the Dollar Index, since Gold is valued in USD. This is true but the basic driver leading Gold higher are the Bond Yields, with Bonds being an asset that is in direct competition with Gold, in the same safe haven category that at times is considered more attractive due to offering yields. Bond yields shown in blue on this weekly chart have been rising non-stop since August 2020, which was Gold's technical market peak (excluding the most recent March 2020 which was fundamentally fueled by the Ukraine/ Russi war). Gold's November rise has been the strongest since that time as it is further assisted by the big drop on the US Dollar Index. This isn't yet a confirmed bearish reversal for the bond yields (US10Y) but is close to do so. As you see historically, especially since 2012 (after Gold's previous cyclical top), we had periods that the gap between Gold and yields widened but was always closed. These two negatively correlated assets have diverged by a wide margin since August and it is highly likely that the recent Gold rally/ Yield pullback is the start of their convergence again. ## If you like our free content follow our profile to get more daily ideas. ## ## Comments and likes are greatly appreciated. ## ## Also DONATIONS through TradingView coins help our cause of increasing the daily ideas put here for free and reach out more traders like you. ##
FX_IDC:XAUUSDLong
by InvestingScope
Bond Market Rallies After Inflation DataBonds have soared after yields collapsed due to CPI coming in slightly better than expected. This follows months of consistently high readings fueling a hawkish Fed. With this reading, the markets will likely start to anticipate a pivot to a less hawkish stance. ZN broke through our target of 110'27, and moved a full handle above that to 111'26. It is currently meeting resistance at 111'29 or so, where a red triangle on the KRI is confirming resistance. Watch for ZN to equilibrate as the news gets priced in. If we can keep going then 113'12 is the next target, otherwise, 110'27 should give support.
CBOT:ZN1!Long
by quantguy
TLT Targeting A Test of 99.19Technical & Trade View TLT (ishares 20+ Year Treasury Bond ETF) Bias: Bullish Above Bearish below 93.27 Technicals Primary support is 93.27 Primary pattern objective is 99.19 Acceptance above 95.40 next pattern confirmation Acceptance below 93.20 opens a test of 90.30 20 Day VWAP bearish , 5 Day VWAP bearish Notes US CPI released today, volatility expected around the print Goldman Sachs expects ‘a below-consensus 0.44% increase in core CPI in October (vs. 0.5% consensus), which would lower the year-on-year rate to 6.46% (vs. 6.5% consensus). We expect moderate increases in both food and energy prices to raise headline CPI by 0.49% (vs. 0.6% consensus), which would lower the year-on-year rate to 7.8% (vs. 7.9% consensus)' Going forward Goldman 'expect monthly core CPI inflation to remain in the 0.3-0.4% range for the next couple of months before edging down to 0.2-0.3% next year. We forecast year-over-year core CPI inflation of 6.2% in December 2022, 3.3% in December 2023, and 2.7% in December 2024. The deceleration we expect in 2023 is driven more by goods than services categories'
NASDAQ:TLTLong
by Tickmill
US10Y About to drop strongly after the 0.75% hike?The US10Y recently broke below the August Higher Lows trendline and remains below the 4H MA50 since October 25. The bearish divergence that RSI's Lower Lows suggested is identical to the one in April, May. The price patterns are very similar and this was a sell signal that dropped to the 1D MA50 and the Support of the previous Higher Low. We have drawn these levels on the current pattern and that Support is at 3.567 while the 1D MA50 at 3.667. With the 1D RSI still on Lower Highs and Lower Lows and the 1W STOCH RSI on a Sell Cross, we expect the US10Y to hit at least the 1D MA50. ## If you like our free content follow our profile to get more daily ideas. ## ## Comments and likes are greatly appreciated. ## ## Also DONATIONS through TradingView coins help our cause of increasing the daily ideas put here for free and reach out more traders like you. ##
TVC:US10YShort
by InvestingScope
2
The US midterm elections - assessing the prospect for volatilityAs we look ahead to the US midterms on 9 November, the question traders ask is whether it has the potential to be a risk event and promote increased cross-market volatility – as part of the risks assessment, the election has implications on whether to reduce trading exposures over the event. Anecdotally it feels like traders aren’t giving the elections too much importance and are looking far more intently at this week’s FOMC meeting and US CPI (11 Oct) – it’s hard to disagree with that stance as trading ‘peak rates’ is the dominant trading thematic - where bad news is good for risky assets, and good news (especially labour market data) is bad for risky assets. However, the makeup of Congress does matter for US economics, even more so given the US is increasingly headed towards a recession and could require fiscal support. As we move ever closer to the 2024 Presidential elections, there is little doubt a split Congress will increase the brinkmanship between the two parties. However, whether this leads to significant market volatility is debatable. When will we get a result? An important aspect of the midterms is timings and when exactly we will have a clear understanding of who will control the Senate and the House – the market naturally wants certainty and an immediate outcome – this is unlikely and trading the midterms means reacting to news as it comes in state by state. With so many choosing to vote by mail, we know that in some states it's only when the polls close on election night that the mail votes are counted. It may be too close to call in some states, and we must wait for the full mail vote to be counted – this suggests we may not actually get a firm result for the Senate and House on election night. The playbook We explain the dynamics of the US midterms in our recent piece - “Trading the midterm elections – what’s important for traders: - pepperstone.com - we can assess what seats are contestable and how many seats each party needs to obtain to win each chamber. The betting markets have Republicans winning both the House and Senate As it stands, PredicIt have the House and Senate going to the Republicans (REP) comfortably – betting markets have a 90% probability the REP claims the House and a 73% chance of controlling the Senate. In the eyes of the market, it’s not even a debate that the REPs claim the House, it’s a lock. The battle for the Senate is where we could see some uncertainty, and while the REPs are expected to be victorious it's not a done deal. So, the strong base case in the market’s eyes, is that we have Biden in the White House and REPs controlling both chambers of Congress. This outcome has implications that can affect markets, so let’s consider the following: Fiscal policy • In a world where inflation is very high governments are already constrained on future stimulus, especially if it leads to increased bond issuance. However, as the probability of a recession increases the need for government assistance also rises, so President Biden may propose a stimulus package, but the REPs would likely reject it in either the House or Senate. In theory, from a fiscal perspective, this scenario is a modest USD negative. • In the far less probable scenario where the DEMs maintain control of Congress and the White House - should the economy need it, then they would be able to pass a sizeable fiscal package – in a recessionary backdrop with rising unemployment, supporting deteriorating economics would soon take priority over inflation – this outcome would therefore be USD positive as it could lift US Treasury yields. Borrowing constraints • With REP potentially controlling Congress, we consider the possibility of another debt ceiling and govt shutdown debacle – in recent times the market has become quietly comfortable with both issues and a re-run of the volatility seen in 2011 seems highly unlikely. However, if the REPs tow a fiscal prudence line and push for reduced govt spending then we could easily be facing a brinkmanship event and a game of who blinks first. While most of the volatility will be centred on ultra-short-term US debt instruments (T-bills), a standoff on the debt ceiling would be USD positive, although the clearer trade would be shorting equities – and as we push close to the debt ceiling deadline the equity market would become ever more nervous and de-risk. Geopolitics • It's hard to draw a clear conclusion on this from a market perspective and while we can look at the US’s relationship with China and Russia, there doesn’t seem to be a clear market catalyst here. In theory, a REP-controlled Congress and Biden in the WH is a modest USD negative, while conversely, the debt ceiling debate is bullish for the USD. So with no dominant directional catalyst, traders will continue to trade the ‘peak rates’ theme but will keep a close eye on the midterms for voting trends and in case it does surprise and proves to be a volatility event. However, with a recession a rising probability and the government unlikely able to support through fiscal channels, it puts all the emphasis back on the Fed – that means their reaction function will need to be sharper and they will need to be ready to shift policy more aggressively if the economy is to rapidly go downhill. In some ways this politicises the Fed, with the economy shaping up to be the key agenda for the 2024 Presidential election.
PEPPERSTONE:USDX
by Pepperstone
US 10-Year Treasury Yield Bullish Engulfing in Focus Before FedThe US 10-year Treasury yield left behind a Bullish Engulfing candlestick pattern on the daily chart this Friday. This is as the bond tested a rising range of support from August. A turn higher from here could open the door to revisiting the October high of 4.33. Otherwise, breaking lower exposes the 50-day Simple Moving Average, which could reinstate the upside focus. All eyes next week turn to the Fed, which is expected to deliver a 75-basis point rate hike. The focus will rather be on their language going forward as markets increasingly expect moderation. TVC:US10Y
TVC:US10Y
by QM_Dubrovsky
InvestMate|DAX time for a correction?🇩🇪 DAX time for a correction? 🇩🇪 During last week's trading sessions, we could see an attempt to stem the declines on Germany's main index, which comprises the 40 largest German companies. The correction from the bottom was already 9%. 🇩🇪 The bottom fell on 28 September and from then on we began to slowly form breakout formations on the chart. We have been making higher and higher highs and lows. 🇩🇪 Looking from a fundamental point of view, the dax index is in the best position relative to other indices. 🇩🇪 Low interest rates at 1.25 per cent are unable to suppress demand for investment loans. tradingeconomics.com 🇩🇪 At the same time, during Friday's session we also saw a strong correction in US and German bonds, which could signal a change in sentiment towards equities and in the medium term could generate an upward impulse on this stock. 🇩🇪 Turning to the chart, we are at a strong support line from which the price has repeatedly been pulled upwards. During Friday's session we tried to go lower but the level was defended. 🇩🇪 If the positive sentiment is maintained, we can expect the price to continue to rise towards 13400 points where I find a strong line of resistance. 🇩🇪 In this situation, it would be appropriate to take a defensive order below Friday's lows and target the 13400 points zone where the range of the last upward correction is also located. This gives us a very good risk/reward ratio of 3.19 🚀If you appreciate my work and effort put into this post I encourage you to leave a like and give a follow on my profile.🚀
XETR:DAXLong
by InvestMate
2