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The Bank of England to end gilt purchase programEUR/USD 🔼 GBP/USD 🔽 AUD/USD 🔽 USD/CAD 🔼 XAU 🔽 WTI 🔽 Amidst domestic financial turbulences, the Bank of England announced an emergency program to purchase UK government bonds - which will end on Friday. The decision was made public earlier by the central bank’s governor, a sudden spike in the Claimant Count Change readings to 25,500 was also detrimental to the British Pound, which made GBP/USD plunge below the 1.100 level to 1.0963, losing over 100 pips. EUR/USD first closed at 0.9703 with minor gains, then climbed to a high of 0.9773, currently at 0.9684. The European continent had growing tensions after the Russian retaliation targeted Ukrainian civilians, as a mobilization in Belarus becomes more likely. Fearing a resurgence of the pandemic in China, AUD/USD closed lower at 0.627, and briefly peaked at 0.6342. A possible stall in oil consumption also sees WTI oil futures gradually declining to $89.35 a barrel. Gold was last traded at $1,666.29 an ounce amidst a volatile session. USD/CAD fluctuated to 1.3796, though the FOMC Meeting Minutes will be released early tomorrow morning, the market doesn’t expect new insights to swat the Federal Reserve’s determined hawkish stance.
by Mitrade_official
SLR Policy Decisions the root of InflationThis idea is a primer for ideas on how the FEDs decision to suspend the Supplemental Leverage Ratio for COVID and Implement the Overnight Reverse Repo while printing QE has led to the complete collapse of the bond market and began the era of sticky inflation. If you overlay the 10Y Breakeven Inflation rate with Year over Year then circle the dates when Jerome Powell Eased SLR for covid and when it expired and implemented changes to overnight repo. You get a clear sense of how the policy decisions around SLR/Overnight Repo while continuing to print dollars is a clear driver for a decline in bonds and equities while also driving up inflation, DXY and Commodities. TLT has completed a massive multi-year head and shoulders and over a half dozen daily bear flags. TLT recently broke through 2014 lows and already flagging lower to 2008 levels. More to come. It's a fascinating time to analyze markets. Wish you saw this coming? Hit the like and follow. Below are charts and ideas I created with warning signs over the past 2 years (I didn't know what some of them meant at the time) but I do now.
NASDAQ:TLT
by SPYvsGME
When USD Hits Resistance, That's When USDMXN Will Breakdown In today's video I will look into a detail analysis of USDMXN, which is doing quite well compared to the strong USD Index. So my assumption is that when USd index will hit resistance, possibly after the 10 year US notes completed the current fifht wave up, the USDMXN can easily break through the support and will be targeting Feb 2020 pandemic low. Crude oil is also very important for the USDMNX. Price is higher for the last two weeks as the situation between Russia and Ukraine is getting worse. OPEC also decided in its first one-on-one meeting since 2020 to cut production by up to 2 million barrels per day from November. So it appears that EU will not have easy task to limit the energy prices. If you like this video, please leave me a comment below and press like. Thank you Grega
TVC:DXY
by ew-forecast
2
#DXY - WIN or LOSS Hello my Fellow TraderZ, Currently this is the most important chart most of the traders eyeing upon - #DXY. #DXY - an index containing the graphical representation of the strength of $USD against major currencies of the World. We can see the #DXY is enjoying the Parabolic Blow off phase after making DOUBLE BOTTOM in JUNE 2021. Now , after breaking certain important levels, it is approaching towards MONTHLY level of 120 after Dotcom Bubble in 2001. As I can see we could possibly have two scenarios to play in the coming days : 1. GREEN - here #DXY will continue its path to 120 giving more pain to Equity markets. 2. RED - here I'm assuming this one to play (anticipating FED's soft behavior towards Rates' Hike), then we could see a retracement towards the 102 allowing Equities to enjoy relief rally in 3-5 months following a major crash globally which could possibly lead to mark the Cycle BOTTOM. NOTE : - Not a Financial Advice, just my speculation. CHEERS!!!
TVC:DXY
by TRADER-GOKU
2
Bank of England Emergency Bond PurchaseLast week, UK pension funds, which hold highly leveraged bond derivative positions, were facing a nearly $1 trillion loss as bond prices crashed and yields rose. The crash in the bond market has been underway for years, but the tipping point occurred when the UK prime minister pledged to cut taxes at a time when inflation is soaring into the double digits. Cutting taxes worsens inflation because less taxes means consumers have more money to spend on inflating goods. Cutting taxes while inflation is high therefore risks worsening inflation or inducing hyperinflation. Fear of this caused the price of UK bonds to crash and yields to spike. (As many of you know well, bond prices move down when yields rise). This crash caused pension funds with highly leveraged bond positions to experience amplified losses, which caused these funds to need to put up more cash collateral on their losing positions. This could have caused a downward spiral because these funds may have had to sell bonds to raise more cash, which would have had a negative feedback loop that could have sent prices down further, amplifying losses more, and creating the need to raise even more cash collateral. The Bank of England had to make an emergency purchase of bonds. However, by purchasing bonds, the Bank of England has taken an action that will now make inflation worse (there will be a lag effect). Whenever a central bank purchases bonds, it is adding liquidity to the system (when the central bank buys bonds this has the effect of increasing the money supply). Increasing the money supply when inflation is at a multi-decade high is super risky. At best it could risk inflation staying elevated for longer, at worst it could spiral into hyperinflation. In the chart above, reproduced below, you can see that when priced in the British pound, crude oil prices are barely declining (as we would have expected from all the rate hikes). If anything, crude oil is looking poised to increase further. The Bank of England, and other central banks, are trapped. Until they stop monetary easing (adding to the money supply) and tighten the money supply such that rates are higher than core inflation, inflation will continue to get worse. Yet, as we now see in the UK, central banks cannot tighten the money supply sufficiently to accomplish this without causing a financial crisis. The rapidity with which the Bank of England switched back on the money printer, despite double-digit inflation, has me convinced that central banks will choose the hyperinflation route. In fact, hyperinflation is already happening in some countries. Argentina has hiked rates to 75% (not 75 bps, 75% or 7,500 bps) and yet inflation continues to spiral higher. There is actually no limit to how bad inflation can get. When people need to pay $100 trillion dollars for food, as in Zimbabwe in 2008, people usually stop believing that central bank fiat notes are valuable and the system collapses. Look at the chart below. I did not log-adjust the chart so that you can see that hyperinflation is when commodity prices rise exponentially over time. For the chart, I used the Invesco Commodity Index Tracking Fund (DBC) and priced it in Argentine pesos. I used cross plots on a smoothened moving average. This level of hyperinflation always leads to some kind of crisis. Either interest rates must crush demand and cause economic decline, or hyperinflation eventually causes a monetary crisis whereby people stop using the currency altogether. Commodity hyperinflation also leads to political instability and the rise of fascist or communist dictators. Furthermore, when these crises occur on a global scale, they can precipitate conflict, and conflict in turn can worsen commodity shortages. For those who have been thinking that inflation has peaked globally, there is no chart that I have seen which validates that conclusion. Indeed, as shown in the chart below, commodity prices continue to break record highs in some parts of the world. In most currencies, commodity prices appear to be bull flagging. Compare the below two charts. One shows how commodity prices continue to spiral higher in Argentina, despite the central bank hiking rates all the way to 75%, compared to 2008, when commodity prices fell while the central bank raised interest rates to just 12%. This shows that we are dealing with a much more dangerous type of inflation. I posted these figures to show just how bad inflation can get and the risks associated with monetary easing. Many people are believing the pig-in-a-python theory, where they think inflation is transitory and will improve when the massive COVID stimulus passes through the pipeline. However, what they fail to realize is that central banks have been putting an endless stream of pigs in the python for decades through monetary easing. Economies have become totally dependent on monetary easing and central banks are now trapped in needing to maintain it. Yet, if central banks continue monetary easing, inflation cannot come down. It just keeps spiraling higher so long as monetary easing continues, assuming commodity shortages also continue. Commodity shortages are deep-rooted and are due in part to war, deglobalization, aging and less productive populations, and climate change to name several factors. Monetary policy has little efficacy on these supply issues. Sri Lanka was the canary in the coal mine. It was the first central government to fall due to commodity hyperinflation. And yet, even after a central government collapse, commodity prices in Sri Lanka are still high. The chart below shows that commodities appear to be bull-flagging, and poised to go higher. Core inflation which is typically stable in the United States is now exploding to a 40-year high. If the Federal Reserve is to be successful at hiking rates to quell inflation, it must hike rates above the core inflation level. There is virtually no central bank with an interest rate higher than core inflation. Indeed, Japan continues to maintain negative interest rates. As I noted in a prior post, because negative interest rates incentivize the creation of money through credit, negative interest rates reflect limitless growth of the money supply. However, as alluded to above, the Fed is trapped. It must hike rates above core inflation, but it also cannot hike rates above core inflation. Decades of monetary easing have left a highly leveraged economy totally reliant on low interest rates. Hiking rates as far as would be needed to quell inflation would likely lead to an economic depression. Pension funds are already under tremendous strain from the hiking and yet the charts show that the scope of tightening that will be necessary is not even in sight yet. The best-case scenario is that commodity supplies improve and demand softens enough to stabilize rates but not so much that economies decline significantly. Even in this perfect mitigation scenario, stock market returns are likely to be muted for years to come.
Editors' picks
TVC:UKOIL
by SpyMasterTrades
65
US10Y Pull-back aiming for the 1D MA50 at least.This is the U.S. Government Bonds 10YR Yield (US10Y) on a 2 year horizon. As you see its aggressive rise can fit only on a Fibonacci Channel. The recent pull-back happened after the price hit the 2.5 Fibonacci extension and the 1D RSI a largely overbought level and the price is already on the 2.0 Fib. As you see, the strongest buys throughout this period have been then the RSI hit the designated Support Zone. Also the strongest pull-backs dropped the price a whole 1.0 Fib level lower. From the previous 2.5 High, the low extension is at 1.5 and that gives us still some room to sell and target at least the 1D MA50 (blue trend-line). Technically it would be best to buy once the 1D RSI enters the Support Zone again, even if that means missing on the lowest possible level. From were we stand today that could be as low as the 1D MA200 (orange trend-line). Regardless of the exact bottom, as long as the 1D MA300 (red trend-line) holds, which has been supporting since January 06 2021, the bullish target is the 2.5 Fib and the 3.0 in extension. If the price breaks below the 1D MA300 though, we will consider this a long-term trend change to bearish and should switch to a sell-the-rebounds strategy. That would affect all asset classes from stocks to Gold etc, but when that happens we will have plenty of time to analyze it. ------------------------------------------------------------------------------- ** Please LIKE 👍, SUBSCRIBE ✅, SHARE 🙌 and COMMENT ✍ if you enjoy this idea! Also share your ideas and charts in the comments section below! This is best way to keep it relevant, support me, keep the content here free and allow the idea to reach as many people as possible. ** ------------------------------------------------------------------------------- You may also TELL ME 🙋‍♀️🙋‍♂️ in the comments section which symbol you want me to analyze next and on which time-frame. The one with the most posts will be published tomorrow! 👏🎁 ------------------------------------------------------------------------------- 👇 👇 👇 👇 👇 👇 💸💸💸💸💸💸 👇 👇 👇 👇 👇 👇
TVC:US10YShort
by TradingShot
3
Morning Update: Bonds vs. The MarketYesterday I saw some comments about how bonds yields have come down recently and that is one of the components aiding the stock markets recent bull run. The above chart is the 10yr Treasury. If you could flip this chart upside down, it would be a chart of the SPX. Here's my concern with this chart and how I'm looking at the SPX. This pattern is not done to the upside in the 10yr. It appears this trend continues well into 2023....where as I am looking for a bottom in the SPX this month or beginning of November. I believe every chart stands on it's own. But its hard to ignore the long standing inverse correlation between bonds and stocks. If this correlation continues into 2023...(I have no information to think I will not) then it is possible this low I'm looking for soon in stocks is just a larger A wave and this wave IV in the SPX and this pattern could drag well into new year. We will know if the next decline in the SPX is one in which we loose any MACD positive divergence we have had on the daily SPX. Best to all, Chris
TVC:US10Y
by maikisch
3
SPY We are BLESSED with a Bullish WeekThe 2 year treasury bill yield has a well known high negative correlation with index prices as it represents the risk of short term capital allocations. When 2 year yields drop, stocks rally and same in the inverse. This is also true with the DXY, which represents the dollars value against other currencies and assets. When the DXY drops, the other asset tied in a pair quite literally increases in value(in dollars) as its denominator has just shrunk. All this to say, we have confirmation from 2 year t-bills and from the DXY to take a long back to local highs. :)
AMEX:SPYLong
by zimeaBlue
1
Some Monday Notes - SPX500 USOIL GOLD BONDS BTCI expect SPX to get to around 3750 and from there we make one more low to around 3500. USOIL looks good for 96 as the destination, Gold looks great for a ride up to 1770's which means the USD should continue falling. Bonds also look good here and I think yields are topping out (or at least we're close). BTC rally and then pullback but ultimately I think everything is a buy after a pullback. Rally hats first for a few days. Good luck!
CME_MINI:ES1!Long
by the_sunship
Out of The Frying Pan, Into The FireIn terms of the global macroeconomic picture, the past two weeks have been nothing short of a firestorm. Last week, the UK government announced plans for unfunded tax cuts and additional government borrowing in the ‘mini budget’. This caused a drastic reduction in market confidence. Consequently the Pound crashed to under $1.04, historically low levels against the U.S. dollar. The volatility currently playing out in financial markets is unprecedented and akin to what we are accustomed to in the world of cryptocurrency. In order to try and stop the sell-off of the pound, yesterday the Bank of England reversed course and announced that it will engage in market operations. This will involve purchasing long-dated UK government bonds (known as gilts) in an attempt to halt the fire sale which was jeopardising major financial players such as Pension Funds. With these market operations, it is now likely that UK inflation levels will rip even higher than the eye-watering levels they are already currently at. The question now becomes, what will be the next central bank to blink and how will this continuous market chaos impact Crypto and other markets? Over the past few days, crypto and wider markets have been holding up relatively well given the state of the wider economic picture. However, with a recession looming the possibility of another leg down looks increasingly likely. In recent weeks we have seen a direct correlation between inflation levels and the price of certain cryptocurrencies. When U.S. inflation data came in on the 13th of September at 8.3%, 0.2% higher than expected, the price of Bitcoin nuked 5% in a matter of minutes. Some market forecasters assume that the Federal Reserve will eventually have to pivot and loosen up its policy, inviting in higher inflation but preserving the global financial system. However, little in the Fed’s communication so far implies that this is either likely or going to happen soon. Ultimately, either decision will have stark consequences for all financial markets, including cryptocurrency. As it stands, a market reprieve and return to an ‘up-only’ bull market seems unlikely in the foreseeable future.
U
by Coinrule
TLT: Order Flow, Auction Process & Failures To RotateHey traders, If we zoom out to check the price action in TLT from a daily perspective, what do you notice? Every single time there is a failure to rotate (hinted via diamond labels), the new expansionary wave leads the market towards a new equilibrium point that so far has been found at much lower prices. I’ve circled each and every instance where these failures to rotate back up occurred. Each market is an auction process, and via the OFA script , we are able to get a pristine read of the constant ebbs and flows. The structure depicted via the script should also be a clear red flag that in this type of well-anchored bear market, being a hero typically gets you in trouble, so stay with the trend. Remember the two key main features of the OFA indicator: Magnitude: A major clue that will help determine the health of a trend is the type of progress by the dominant side in control of the trend. We need to ask the following question: Are the new legs in the active buy-sell side campaign as identified by the script increasing or decreasing in magnitude? Velocity: When it comes to the distance the price moves, the magnitude is only ½ the equation. The other ½ has to do with the velocity of the move or the speed. Was the new leg created after a fast and impulsive move? Or did price make a new low or high with the movement being sluggish, compressive and taking too long to form? A good rule of thumb is to count the number of candles it took to achieve a new leg. DISCLAIMER: This post contains commentary published solely for educational and informational purposes. This post's content (and any content available through links in this post) and its views do not constitute financial advice or an investment or trading recommendation, and they do not account for readers' personal financial circumstances, or their investing or trading objectives, time frame, and risk tolerance. Readers should perform their own due diligence, and consult a qualified financial adviser or other investment / financial professional before entering any trade, investment or other transaction.
NASDAQ:TLTEducation
by FlowState
6
Wednesday notes - SPX Wheat Gold DXY DAX Bonds etc.Some pre market commentary, SPX - expecting a bear trap after open, then higher. Wheat may be affected by the hurricane in Florida, Bonds hit an important fib extension, Gold looks promising if it can get over 1675 resistance, DXY also looks like it may pullback - BTC could still move to lower 18000 area before a move up (would align with one more low in equities) but it doesn't have to go down that far. Dax has broken monthly trendline, expect a retest over the coming weeks. I forgot oil - looks good for a strong bounce here, pullbacks are likely bought. OK good luck!
XETR:DAXLong
by the_sunship
2
$TLT - 20Y Bond index - BUY?Clearly, inflation is a problem and I for one thought the rates rising were overblown after the first hike. (I was very wrong here) With that said, we are likely in the topping process for inflation, pending any new black swan events happen. The indicators show 4 things in regards to this bond. 1. No momentum, 2. Bear market trend 3. below the historical anchored V-WAP (so most who own this EFT are underwater) 4. Bottoming on a Fib. The best way to play this is to buy tail-risk long-dated calls. Keep position small given the macro market, but clearly, this is an opportunity that hasn't been available for a while in the bond market.
NASDAQ:TLTLong
by rwoods187
SPX/US10Y/VIX - you are welcomeHey !! So I've been digging and experimenting with multiple market instrument relations and I have picked those three - SPX, 10 year bonds and VIX as they are the most powerful of all. And I have noticed it has been creating a really clear trend of up and downs - comparing it to SPX it has shown that everytime we have touched the bottom trendline - the market bounced - ONLY in 2008 we have crashed way below - but whoever has bought below that trendline - was happy a few years later. Where are we now? At the lower trendline - a bounce is coded in but I am more than certain, that we will repeat 2008's crash to say the least. We're good for a bounce now, my absolute bottom sits at the bottom trendline. Monitor the breakout! PS : Also - the peak from AUG 2020 was lower in price on SPX than we are now.
SP:SPXLong
by TheSecretsOfTrading
1