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US10Y

What's a Tea! Fed Policy Expectations Plunge Gold to Key SupportGold declined marginally by 3% in September hitting its major support of 52 weeks SMA, in the face of higher long term Treasury yields TVC:TNX and a stronger Dollar index TVC:DXY . Sentiment remained weak for most of the month as ETFs continued to lose AUM while COMEX managed money net long futures positions fell to a five month low previously in August 2023. 👉 Since July, long-dated yields have risen faster than short-dated yields, meaning the yield curve is exhibiting a "bear steepening", something often seen during a reflationary or early business cycle period. 👉 Following this thesis, lets compare 13-Weeks Treasury Bills Yield CBOE:IRX.P that jumped in 3 months from 5.150 to 5.330 only, and 10-Years Treasury Notes Yield TVC:US10Y with gains from 3.820 to 4.630 at the same time. 👉 While gold tends to underperform risk assets during these periods, it is not common to see bear steepening this late in the business cycle and recent moves in yields may be masking other factors at play, such as higher risk premiums 👉 Soft US economic data suggests also that a slowdown is still likely, which, alongside a potential change in the shape of the yield curve, could signal an environment where gold has historically performed well. Yields take center stage 👉 August and September were challenging for gold. After dipping below US$1,900/oz, it staged a late recovery – around the Fed’s Jackson Hole annual symposium, than turned more down after Fed's September Meeting to finish September down approximately by 3 per cent. 👉 The US Treasury yield curve is arguably the most important financial indicator around, and its trajectory and shape are constantly under scrutiny. Most of the time (90%) it slopes upward as investors need to be compensated for lending their money for longer. But at these times, it inverts. As it has since July 2022, suggesting bond market participants are waiting Fed's monetary policy tightening continuation. Lets Compare Gold Spot in U.S. Dollars (RHS) vs. 6-Months Fed's Policy Expectations based on Jun'24 30-Days Federal Funds Futures CBOT:ZQM2024 (LHS) Gold Spot in U.S. Dollars (RHS) vs. 12-Months Fed's Policy Expectations based on Dec'24 30-Days Federal Funds Futures CBOT:ZQZ2024 (LHS) What’s next 👉 In summary, the move in the 10-year yield can likely be attributed to three main factors. A shift up in the ‘higher interest rates for longer’ narrative, supply and demand forces and a rise in the risk premium. 👉 The latter factor might start to provide support to gold prices, if it continues to increase from its key support of 52W SMA. 👉 If we simply look at bear steepening, gold tends to underperform – with low single digit average returns. Historically, the most likely successor to a bear steepening is a bull flattening (approx. a third of the time). This is characterized by a fall in the long end of the curve relative to the short end, effectively an unwinding of the rising premia we’ve witnessed. 👉 This partly took place at the latter end of September with gold likely benefitting from such yield declines. Also, soft data continue to suggest that a slowdown is still firmly on the cards. This could result in either a bull steepening or a rare "bear-". Both phases have on average been gold friendly, yielding an annualized return of 15% – the highest of all the phases. Gold Market Breath 👉 What is Market Breath overall? 👉 Market Breath is a Percentage of Index Components Trading Above their N-Period Moving Average. 👉 Traders can use this index to see what percentage of index components are trading above their N-period moving average, for example, above the 200-day moving average. 👉 A rise above 50% in the indicator indicates increased market strength, while like the index of new highs and lows, traders and investors often look for extreme values to find extreme overbought and oversold conditions in the broader market. 👉 Gold Market Breath Indicator INDEX:YATH (number of S&P/TSX Global Gold Index TSX:TTGD above 200-Day SMA) is at 2.43, that is one of the lowest multi year readings . In conclusion, there are some reasonable considerations for further Gold spot purchases following the thesis that 52W SMA is a strong support for Gold in 2023, and further Fed's Policy expectations for upcoming 2024 are fully in the hands already.
OANDA:XAUUSD
by Pandorra
5
DXY and Yields are set up to Rise as SPX Tests Range ResistanceThe DXY is sitting at the HOP level of this Bullish Deep Crab for the second time, generating PPO Confirmation Arrows during both tests, while the Yields are sitting at the PCZ of a Bullish Bat with PPO Confirmation, all while the SPX500USD is testing what used to be Former Range Support as New Resistance. If everything lines up here as it seems, we should see DXY and Yields Rise once more as the SPX rejects the old trading range in what I anticipate to be a fairly violent way.
TVC:DXYLong
by RizeSenpai
1
US10Y: Soaring Bond Yields as Federal Reserve Maintains Hawkish The Fed Hawkish Stance During Wednesday's address, Federal Reserve Chair Jerome Powell reinforced his stance on tackling inflation with a more cautious approach. He emphasized that the central bank is not yet finished with its efforts to curb inflation and hinted at the possibility of implementing multiple interest rate increases during future monetary policy meetings. Powell's statement comes as a response to the ongoing challenge of bringing down inflation, which has consistently remained above the central bank's target of 2%. Notably, some Fed officials have emphasized in recent speeches that inflationary pressures persist. They specifically highlight core inflation, which excludes the volatile prices of food and gas, as not decelerating as rapidly as overall inflation. The aforementioned statement supports the potential scenario of higher Government Bond Yields in the future, as an increase in interest rates typically correlates with elevated yields. Technical Analsyis The U.S. government's 10-Year Bond Yield has undergone a retracement, precisely at the 0.5 Fibonacci ratio, establishing a support area. Notably, the yield currently exhibits a bullish trend as it remains above the EMA 200 line, indicating positive market sentiment. Furthermore, the Falling wedge pattern suggests a continuation of the prevailing trend. Complementing this observation, the stochastic line crosses within the neutral area, further bolstering the case for a possible upward movement toward the target area. It is important to keep in mind that once the target/support area is reached, the roadmap provided may no longer be valid. If you find this analysis helpful, I encourage you to show your support by clicking the rocket button and sharing your opinions in the comments section below. "Disclaimer: This analysis is intended solely for educational purposes and should not be considered as a recommendation to take a long or short position on the TVC:US10Y ."
TVC:US10YLong
by financialfreedomgoals101
9
CURRENT GOLD CYCLE👇🏽2017 - 2021: Market made its first impulse wave. Created a new ATH (all time high) at $2,074. 2022 - 2023: Long term correction & accumulation for buy orders. Also, market trapped late buyers at the top, who got in during the end of Covid. Liquidated them during the correction. 2024 = New all time high’s for the market. Markets move in cycles. Never a straight line. Those who fail to understand cycles & want quick profits, will fail even quicker📝
SAXO:XAUUSDLong
by BA_Investments
🏘 Housing Bubble v 2.0: What Does It Mean for US Stock MarketMuch to the chagrin of would-be homebuyers, property prices just keep rising. It seems nothing - not even the highest mortgage rates in nearly 23 years — can stop the continued climb of home prices. Prices increased once again in July, according to the latest S&P CoreLogic Case-Shiller home price index , with 19 out of 20 markets measured showing month-over-month gains. In another reflection of ongoing increases, the National Association of Realtors (NAR) says more than half of U.S. metro areas registered home price gains in the second quarter of 2023. So much for the idea that a "housing recession" would reverse some of the outsized price gains in homes. The U.S. housing market had finally started slowing in late 2022, and home prices seemed poised for a correction. But a strange thing happened on the way to the housing crash: Home values started rising again. NAR reports that median sale prices of existing homes are near record highs. Home prices in August 2023 rose 3.9 percent year-0ver-year to reach $407,100 — near the all-time-high of $413,800, and only the fifth time any monthly median has eclipsed the $400,000 mark since NAR began keeping records. The housing recession is essentially over, or has just began!? Home values have held steady even as mortgage rates have soared past 7 percent, reaching their highest level in more than 20 years in August. The culprit is a lack of housing supply. Inventories remain frustratingly tight, with NAR’s August data showing only a 3.3-month supply. 30-Year Fixed Mortgage Interest Rates Turn Higher, as 200-Month SMA Key Resistance was broken earlier in 2022. Average Annual Mortgage Interest. 30 000 U.S. Dollars Rubicon is at the hands. After the Federal Reserve’s meeting in June, Fed Chairman Jerome Powell told reporters he was keeping a close eye on the housing market. "Housing is very interest-sensitive, and it’s one of the first places that’s either helped by low rates or held back by higher rates," - Powell said in the press conference. "We’re watching that situation carefully." Housing economists and analysts agree, regardless, that any market correction is likely to be a modest one. No one expects price drops on the scale of the declines experienced during the Great Recession. Is the housing and stock markets are going to crash? The last time the U.S. housing market looked so frothy was back in 2000s. Back then, home values crashed with disastrous consequences. When the real estate bubble burst, the global economy plunged into the deepest downturn since the Great Depression. Now that the housing boom is threatened by skyrocketing mortgage rates and a potential recession so buyers and homeowners are asking a familiar question: Is the housing market about to crash? 5 reasons ("cast in bronze") there will be no housing market crash 1. Inventories are still very low. 2. Builders didn’t build quickly enough to meet demand. 3. Demographic trends are creating new buyers. 4. Lending standards remain strict and impose tough standards on borrowers. 5. Foreclosure activity is muted: In the years after the housing crash, millions of foreclosures flooded the housing market, depressing prices, and it’s nothing like it was two decades ago. Funny, but all of that adds up to the one only consensus: Yes, home prices are still pushing the bounds of affordability. But "Ooh not", this boom shouldn’t end in bust. 😏 History does not repeat itself. But often rhymes. Technical graph for ECONOMICS:USSFHP - U.S. Single Family Home Prices illustrates there has been a while, without new all time highs in Top Four U.S. Stock market indices while Housing Bubble was exist in 2000s. So lets see, will be the same in 2020s or not, while 2023 is a second straight year without new all time peaks in S&P500 SP:SPX , in Nasdaq-100 NASDAQ:NDX , in Dow Jones Index AMEX:DJIA as well as in Russell 2000 Index TVC:RUT
ECONOMICS:USSFHP
by Pandorra
Inflated risk – assessing the biggest pain trade in markets Arguably one of the biggest themes through Q323 was the one-way trend in the USD. During the quarter we saw trade-weighted USD gain 3.1%, with the USD essentially outperforming against all G10 currencies, except the NOK, which caught strong tailwinds from a surging crude price. We consider the recent drivers, but we explore the scenarios that could see further gains in the USD as we roll into Q4. One such scenario is the potential for a rise in inflation, an outcome that could really shake things up in markets. Everything worked for the USD in Q3 One of the clear USD levers has been the US economic ‘exceptionalism’ story, where the US economy has arguably been the best house on the street. Case in point, the Federal Reserve recently upgraded its 2023 GDP forecasts by 1.1ppt to 2.1% and 0.4ppt to 1.5% in 2024. Contrast the Fed’s positive actions to the weakness seen in China’s economy and concerns about the property sector – growth downgrades from the ECB, amid contractions in EU & UK service PMIs, with falling inflation leading the BoE to hold rates in the September meeting. The Fed also reduced the level of anticipated rate cuts in 2024, portrayed in their ‘Dot Plot’ projections, by 50bp. This was a surprise to many, but this was designed to enforce the notion of a higher-for-longer policy stance, while signalling a view that they are not looking at rate cuts anytime soon. This action has also seen both nominal and real US Treasury yields pushing to multi-year highs across the ‘curve’, with the US 10-year Treasury really underperforming, with yields hitting 4.70% and the highest since 2007. Moves in Treasuries have supported the USD’s valuation, but it also increased the demand for USDs as a hedge against equity drawdown. The US labour market is tight but cooling As Q4 gets underway, the US labour market will continue to get a strong focus. While we await the September nonfarm payrolls report, we head into the report seeing a cooling in the labour market. Inflation is expected to head lower – but, what if? Where life becomes truly problematic would be if US inflation were to rise despite a further cooling in the labour market. With market-based consensus expectations (seen in CPI ‘fixings’) for headline US CPI to fall to 3% in 6 months’ time and 2.25% over the coming 12 months, any scenario which has us truly questioning this pricing could increase uncertainty and see volatility rise across markets. On 12 October we see the US September CPI print. Expectations currently sit at: · The consensus from economists is we see headline CPI at 0.3% MoM / 3.6% YoY (from 3.7%), while core CPI is eyed at 0.3% MoM / 4.1% YoY. · The Cleveland Fed Nowcast model sees headline CPI coming in at 3.7% and core CPI at 4.2%. · US CPI fixings (a way for interest rate traders to set a view on where inflation will be on release) sit at 3.58% for headline CPI. Taking an aggregation of these market/economist expectations the lack of dispersion suggests market participants will have some confidence in their positioning over the upcoming CPI release. This suggests that if we do see an outcome vastly different from consensus expectations it will cause a big move across broad markets. The big pain trade therefore comes from higher US core CPI print – let's say over 4.3%, married with a tick up in the well-watched ‘supercore’ print (core CPI ex-services & ex-shelter print). This potential outcome may force the Fed's hand at the November FOMC and compel them to hike by a final 25bp. The result would likely be further new cycle highs in US nominal and real Treasury yields, with the USD finding fresh buyers and taking a new leg up. A higher USD driven not by resilient growth dynamics (and increased supply), but by a turn in inflation would not be taken well by equity markets or risk assets more broadly. Gold would trade closer to $1800 and the VIX would trade towards 25%. It could also accelerate the prospect that the BoJ/MoF intervene to support the JPY. As traders we manage risk, and we attempt to price certainty – a renewed rise in US core inflation seems a low probability, but it is a scenario which could play out and the risk needs to be managed. Any situation which threatens the market's central vision and pricing will create sizeable market volatility. Could the USD be looking to take a new leg higher? Potentially, and we can also need to consider a world where inflation does fall as expected to target and labour markets cool. However, if we’re assessing what could really get volatility pumping it’s the idea of the Fed hiking in November and inflation threatening the market’s trajectory on inflation. It pays to recognise the risk, keep an open mind, and be prepared to react - it will serve you well in markets.
PEPPERSTONE:USDXLong
by Pepperstone
The Dow DilemmaWe are at a crossroads. As if we have nothing to invest in. Gold is, in absolute terms, highly overpriced. Gold is more than 50% above the 24 year average. And highly diverging... It still is the massive elephant in the room. Yield rates are the small rat in the room. Due to fast rate hikes, the bond market has suffered incalculable losses. Gold (elephant), just like many people, are afraid of rats (and yield rates). Current consensus is that yield rates are to grow forever, pushing dollar in all-time highs. But consensus cannot take us far... Dollar is showing signs of weakness. The rate hike party may not last long... And equities are still problematic. With massive amounts of money printed in the last 3 years, surely the problems are yet to come. In the main title I talked about a dilemma. DJI divided by Money Supply is warning us. But who is listening? Everyone seems to have disappeared. I am walking around with a lantern in my hand, looking for people, just like Diogenes the Cynic did. This is the micro view. Let's see at the macro view. DJI is joking to us. Short-term it shows clear weakness signals. Long-term it shows the most bullish of signals. My opinion? I expect short-term problems in the equity market. But the problems that may come could be smaller than anyone expects. A relentless equity bubble may form, trapping investors who brace for a downwards impact. In the end, things are not as simple as we may think... And all we are left with is a dilemma. Tread lightly, for this is hallowed ground. -Father Grigori
DJ:DJI
by akikostas
7
GOLD SHORT TO 1767 (4H UPDATE)📉Now that TP1's been hit, our focus turns towards TP2, something that we knew could happen as highlighted on the first analysis, but still saw as unlikely. However, now it's looking very possible! In order for this move to playout, we are looking for the following👇🏽 1. Consolidation. 2. Breakout (Expansion to Downside). 3. Retest of Expansion Zone. Price of grey expansion zone will become more clear once breakout happens. Will try to keep you all updated on the move as it happens. If market does a U-Turn we will also update accordingly.
SAXO:XAUUSDLong
by BA_Investments
2
GOLD SHORT TO 1767 (4H UPDATE)📉Now that TP1's been hit, our focus turns towards TP2, something that we knew could happen as highlighted on the first analysis, but still saw as unlikely. However, now it's looking very possible! In order for this move to playout, we are looking for the following👇🏽 1. Consolidation. 2. Breakout (Expansion to Downside). 3. Retest of Expansion Zone. Price of grey expansion zone will become more clear once breakout happens. Will try to keep you all updated on the move as it happens. If market does a U-Turn we will also update accordingly.
SAXO:XAUUSDShort
by BA_Investments
US 10Y TREASURY: digesting week is over?Markets spend the previous week digesting the latest information from the FOMC meeting regarding interest rates levels in the coming period, as well as FOMC economic projections for the next two years. It all created one quite a challenging week on US financial markets, as well as for the US Treasuries. The 10Y yields reached 4.5% immediately after the Fed Chair speech after the FOMC meeting on September 20th, however, during the previous week yields continued to surge further, reaching the highest weekly level at 4.67%. This could be treated as a sort of market overreaction, as yields soon returned to the level of 4.57% where they are finishing the week. Yields continued to move within an overbought momentum for a second week in a row. This adds to the high probability that yields will further move toward the 4.5% levels which is more realistic to current economic prospectus and wording supported by the Fed. At this moment on charts, a 4.3% level could be the next target for 10Y yields, however, it might take some week or more until yields clearly reach this level.
TVC:US10Y
by XBTFX
XAUUSD This is the only way it can realistically reverse.Gold (XAUUSD) hit yesterday the bottom of the Channel Down pattern that started after the July 20 High. This is a short-term buy signal targeting its top (Lower Highs) but on the long-term Gold has been on a downtrend since the May 04 All Time High (ATH). Following the rise on the June 29 Low, Gold was still on a long-term uptrend, supported by a Higher Lows trend-line. That trend-line broke after both the US10Y (blue trend-line) and the DXY (green trend-line) invalidated their bearish patterns (US10Y broke above its 4.070 Resistance, DXY broke above its Lower Highs trend-line) and both entered Channel Up formations. Since Gold is for the most part negatively correlated to the two, it should be no surprise that it started the Channel Down we discussed out at the same time. Realistically we can only expect a long-term bullish reversal on Gold after the Channel Down patterns of the DXY and US10Y break downwards and mostly the latter, which as you see is more tightly correlated to Gold. Until then, a potential bottom rebound can only be a short-term buy signal for Gold. ------------------------------------------------------------------------------- ** Please LIKE 👍, FOLLOW ✅, SHARE 🙌 and COMMENT ✍ if you enjoy this idea! Also share your ideas and charts in the comments section below! ** ------------------------------------------------------------------------------- 💸💸💸💸💸💸 👇 👇 👇 👇 👇 👇
FX_IDC:XAUUSD
by TradingShot
2
Why we expect EURUSD SPX to keep falling.Dear fellows. In this short video we present our case that EURUSD tracks US10Y since 2020 on an inverse relationship. We also expect the yield curve to keep steepening, and by assuming Fed funds rate "higher for longer", US10Y is expected to rise further. Higher US10Y, thus, implies in lower EURUSD and SPX, as well as other major market indexes. The particular dynamics of each does not ensure a day to day follow up, however, eventually they do catch up. Thank you very much for your time. Critics and suggestions are welcome. Best regards.
TVC:US10YShort
by greenfield_br
3