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US10Y

Futures Dip Ahead of Potentially Hawkish Fed MinutesGood morning, folks! It was a relatively quiet overnight session with futures drifting sideways and trading essentially flat as we approach the open. As of 8:45AM the Dow is down -0.20% to 35,187, the S&P is down -0.11% to 4,438.75, the Russell is up 0.11% to 2,176.90, and the Nasdaq is down -0.3% to 14,989.75. Traders will be keeping a close eye on today's Fed minutes (from July) for any hints/announcements of balance sheet tapering, changes to the inflation/economic outlook, and of course, any changes in rates. It's unlikely we'll see any major policy changes from the last meeting, however, I do expect more of the members to begin turning hawkish as PPI approaches 8% and CPI 5.5%. Some analysts expect the Fed to announce a taper schedule to begin as early as October and to run for as long as 10 months into mid 2022. That sounds about right, but if markets or the economy react poorly to the Fed's tighter policy stance, how long until they reverse course (again)? Wash, rinse, repeat. Moments ago we saw the MBA Mortgage Applications Index come in at -3.9% vs the prior print of 2.8%. We also saw Housing Starts come in at 1,534k vs the 1,610k expected, while Building Permits rose 1,635k vs the 1,610k expected. At 10:30AM we'll see the latest EIA Crude Oil Inventories, and then of course, at 2:00PM we'll get the July Fed minutes followed by the Powell Q&A. * I am/we are currently long HUV, UVXY
AMEX:SPYShort
by Hedge_Of_The_World
6
Currencies - Dollar Rises with QEIdea for Currencies/Macro: - Contrary to popular belief, since 2008, the dollar RISES with Fed Balance Sheet expansion. - There is currently a large divergence which I speculate to close with the dollar rising. Either the Fed Balance Sheet can be reduced, or the dollar will rise... Obviously the balance sheet will not be reduced for a long time, if ever. Why is this so? Doesn't printing more money devalue currency? 1. - Central Bank creates reserves, not a form of liquidity that directly enters the economy. It's still inflationary of course. - G-SIBs and commercial banks can then either rebalance their holdings to purchase assets, or create credit based on this collateral which enters the economy. - These swaps also lower rates, which creates the perception of invincibility and causes price inflation of risk assets (purely speculative!). - However, when debt is serviced (credit impulse turns negative) this destroys liquidity. 2. - A few $trillion from the Fed is just a drop in the eurodollar market, it does not amount to much, relatively speaking. - Other Central Banks have expanding their balance sheets more than the Fed. Since currencies are relative, this is bullish for the dollar. - Eurodollar futures are declining, signaling a SHORTAGE of dollars and liquidity destruction elsewhere, at a greater rate than QE. QE has been ongoing since 2008. Eurodollar market is the market, simply put. Over 90% of international trade is financed through the eurodollar market. I don't think there is any question that a recession is coming when the monetary tightening inevitably comes. Central Banks Balance sheets vs GDP is higher than it was before/during/after the Great Depression or WW2. Total Assets to GDP: IMO yields respond to credit impulse immediately, and their trend supports liquidity destruction in the Eurodollar market. Eurodollar futures are not a currency market but a reflection of LIBOR interest rates. It is an expression of inflation expectations: What is actually happening? - Interest rate driven QE is not working to create economic growth, and we are experiencing global deflation. - QE is failing to create high quality collateral, but instead collateral is being sucked out of the international markets. - Capital flows and credit impulse are negative (deflationary). - Fed went all out, but international money markets did not respond. Real wealth is being destroyed and there is nothing the Central Banks can do about it. Speculation: - Since Credit Cycle leads currencies/collateral, and it is turning down, debtors are withdrawing collateral from risk assets to service their debt. - High quality collateral is being sucked out from underneath the equity bubble (distribution). - Leading institutions will service debt and sell risk before monetary deflation arrives. There will be a dollar shortage and a squeeze. How does this trickle down and affect US equities? It affects the EURUSD pair, which is synonymous with risk appetite (It is an indicator not the cause). EURUSD: Where EURUSD goes, oil and tech go... and where oil and tech go, the stock market goes. Anyway, a relatively safe way to play this would be simply to long USD for the mid-long term (UUP etc.). You can try to short the bubble like me, but be ready for some pain as the timing is tricky and bubbles rise the most at the end. Keep in mind that this isn't really a trade signal but a trend. However, the day of the rugpull is indeed coming. Looking at the trend for DXY, 114-120 seems like a reasonable target. GLHF - DPT
TVC:DXYLong
by UnknownUnicorn1043646
11
Bonds - US10Y Cannot and Will Not Rise SignificantlyIdea for 10Y Treasury Bond Yields: I speculate that yields cannot and will not rise significantly until the equity bubble pops. I think that it will start a wave reaching 0.7 this month. Why is that? - There is almost $300 trillion in private sector debt globally. - Companies used margin debt for share buybacks to boost EPS, creating the illusion of economic growth. - There is a borrowing cost for private debtors, debt must be serviced. - 10Y is used as a risk-free rate benchmark for credit derivatives, especially for risk spreads. - Furthermore, rising yields means that a rate hike would inevitably follow. - The premium on credit risk is at a record low (BBB). - Even junk bonds and Greece is negatively yielding. - Zombie companies are at an ATH (one that isn’t generating enough income to cover the annual interest payments on its debts. With interest rates so low, these zombies have stayed “alive” by refinancing their debts at increasingly lower rates, or simply tacking on more debt to keep breathing. But with rates rising, zombies may be forced to refinance at higher rates.) - Since debt is increasing, the magnitude that rates can rise before negatively impacting the private sector is decreasing. Any significant rise in rates will quickly cause mass insolvencies in these zombie companies, which also would cause a cascade of liquidations in yield chasers who had sold credit default swaps - accumulating asymmetric risk. It is a massive, massive bubble, and any significant rise in rates would collapse the equity market and the economy. The only way to keep equities stable would be for negative rates, but the dollar is without a doubt - rising. As debt rises, liquidity is sucked out of the collateral pool in a proportional amount. You will just eventually get to a point where debt servicing becomes too expensive anyway from a collateral supply perspective. That's the fundamental condition which will eventually bring about the reflexive regression to the mean. So is it a slow and painful death, or a quick flush? I'd bet on the latter... more money to be made for insiders who short it. In fact, I would wager that the Bill Ackmans of the world are betting big on credit default swaps on zombie companies, similar to CDSs/CDOs on subprime mortgages in 2008. People are buying with both hands bonds which are expected to yield less than what they paid for at the maturity. Any change in conditions would cause this to be capitulation into a bid-less market, don't you think? It's pure insanity and there is only one thing to do here. GLHF - DPT
TVC:US10YShort
by UnknownUnicorn1043646
4
Macro - Reading The CurveForecast for Macro: - Falling Wedge Breakout must be re-tested. - Bear Flattener coming as short-term rates rise with Fed tightening expectations: - 2x ATR spike in US02Y: - The Fed members will probably all have their turn to make comments, leaning hawkish. This should cause a rally in the US02Y. - Bonds Volatility Technically Bullish: - However, this will be followed by a steepener, respecting the Falling Wedge Breakout, as the Fed implements monetary policies to control Deflation, creating a Stagflation environment. - US30Y, this is bearish and deflationary: - USOIL, deflationary. The US economy depends on Oil: - US Manufacturing Employment Index, looks to be at the top of the range, and on a decline: - Capital goods are the heart of every economy. Without manufacturing employment, no capital goods. No capital goods, no innovation. - CN30Y, also bearish and deflationary: - China's Credit Impulse, and consequently - global credit impulse turns negative. - No more credit flows means no more liquidity to flow into risk assets. - M2V declining, if the economy was booming and growing, money velocity should be increasing: - Business destruction cannot be inflationary. Thriving tech businesses lead the recovery, but Tech is inherently deflationary. - Reading the curve will be critical to see the macro turns coming! GLHF - DPT
TVC:US05Y
by UnknownUnicorn1043646
1
XAUUSD / GOLD : Ready to BUY SIGNAL - ALL the Factor are on BUY OANDA:XAUUSD In the last session on Friday, we saw a massive Sell Off in Gold due to the NFP number over the estimates. But the price failed to breakout the IMPORTANT LEVEL 1760, and closed above it. THIS IS A VERY IMPORTANT SIGNAL ! In the graph you can see that in this level we got a lot of Support for GOLD: 1)We got the previous Lower Bottom of July (and at the moment we are forming a Double Bottom) 2)We got the Trending Line from the past Lower Low that the price had already touched and reversed twice 3)We also have another big Resistance at 1750 4)The RSI it's already in OVERSOLD condition, like in April when we had a huge reversel till 1920 5)As you can see in the graphic below , of US10Y ( the Yield of the 10Years Bond USA) that has an inverse correlation with Gold, We are in a Bearish Trending channel and we are near 2 important Resistences , 1 of the trending Line and the 2nd of the past July High, that formed a Double Top. Also we are in Huge OVERBOUGHT condition so a retracement it's very likely CONCLUSION I think that next week we could see a retracement at least to the past Finobacci Level 0.23 , at 1788 Then we will see how the price will react to that level, but I won't be surprised if it also touched the 1800 This is only an idea , This is not a Signal of Trading but a personal view-
OANDA:XAUUSDLong
by Zerbo98
US10Y testing the 1D MA200. Another rejection ahead?The US10Y is about to hit the 1D MA200 again (orange trend-line) where last time failed to convincingly close a candle above it and eventually got rejected. That also happened to be on the 0.382 Fibonacci retracement level, which is a symmetrical level as it previously was a Support (July 08) turned into Resistance. There is also a potential 1D Death Cross (when the MA50 crosses below the MA200) to keep an eye on. The last 1D Death Cross was back in January 2019 and was devastating for the yields. Equally the November 17, 2020 Golden Cross (opposite of Death Cross) initiated a very strong rally. If the price gets rejected again inside the Channel Down, I expect the next target to be near the 0.618 Fibonacci retracement level in the form of a Lower Low. ** Please support this idea with your likes and comments, it is the best way to keep it relevant and support me. ** -------------------------------------------------------------------------------------------------------- !! Donations via TradingView coins also help me a great deal at posting more free trading content and signals here !! 🎉 👍 Shout-out to TradingShot's 💰 top TradingView Coin donor 💰 this week ==> sikret --------------------------------------------------------------------------------------------------------
TVC:US10YShort
by TradingShot
4
Bond yields keep fallingBonds all across the world, across all different spectrums (from gov bonds to junk bonds) have been rising (their yields falling). This is a signal that there are deflationary pressures and that people are searching for yield in an environment with few opportunities. There are other reasons too, but overall this isn't the best signal. Clearly big corporations and governments are benefiting from the situation, but this is also a fragile situation. Although the current conditions benefit some stocks and risk assets due to the highly negative real rates, this doesn't mean that everything is perfect. Personally I believe equities haven't topped and they have much more room to grow from here, but I also think a big correction isn't far away (10-20%). In my opinion bond bulls are in control (bearish on yield) and yields could fall even lower.
TVC:US10YShort
by BitcoinMacro
5
Futures Sink as ADP Pukes, Data in FocusGood morning, folks! As of 8:45AM on Wednesday morning, US Futures are seeing some light weakness with the Dow down -0.33% to 35,003, the S%P down -0.27% to 4,411, the Nasdaq down -0.10% to 15,046, the the Russell down -0.82% to 2,202.80. The ADP Employment Change came in moments ago at 330k vs the 650k expected, and the weak print has erased some of the overnight gains, but we're still holding on to most of yesterday's gains, so nothing to write home about. The dollar (DXY) is holding steady just under a 92 handle (91.91), while the US10Y yield is also seeing persistent pressure as we continue to see heavy bond inflows. The Treasury has announced that they will begin reducing the size of bond auctions at the Nov 2021 meeting. That's going to make it tough for the Biden Administration to maintain current spending levels, and so with a reduction in Treasury supply ahead, monetary conditions are going to tighten as early as November, maybe even earlier if the Fed decides to taper purchases/hike rates at Jackson Hole. Clearly the bond market knows something the stock market doesn't, and if the crashing US10Y yield is mimicking last years drop, we're likely about to see a major correction in markets. Having said that, we still have room to the upside in stocks (based on the technicals), particularly considering we're holding on to key supports like it's a religion, and money is still free. Every dip is being bought without hesitation, and that really hasn't changed (yet). Yesterday was a perfect example of how easy it is for the bulls to achieve new ATH's. Gold is seeing some solid flows here as Powell continues to punish the Ctrl + P buttons on his keyboard. But, while Gold rallies, Bitcoin (BTCUSD) is seeing persistent pressure at 40k and has been unable to breakout since we lost this level in May 2021. Bitcoin and Gold do not trade in tandem - Gold trades as a safe haven along with the JPY, Dollar, Treasuries, to name a few, while Bitcoin trades like a risk asset. When markets correct and money flows out of risk, crypto gets hit the hardest as it carries the most risk/highest beta across most asset classes. Let's see how the day shapes up as more data rolls in. At 9:45AM we'll see the IHS Markit Services PMI for July, then at 10:00AM we'll get the ISM Non-Manufacturing Index, and then finally at 10:30AM we'll see the latest EIA Crude Oil Inventories for last week. Good luck out there today, my friends, and see you all at the opening bell for our Live Analysis. Cheers, Michael. * I am/we are currently long UVXY, HUV
AMEX:SPYShort
by Hedge_Of_The_World
2
The Finish Line Is In SightGood morning, folks! For those of you in Canada, I hope everyone had a great holiday to start the week. Let's get right into today's analysis. After rolling sell programs yesterday to kick-off the month of August, US Futures are drifting higher on Tuesday with the Dow up 0.25% to 34,808, the S&P up 0.22% to 4,389.50, the Russell up 0.46% to 2,221.10, and the Nasdaq up 0.14% to 14,973.50 as of 8:30AM. SPY saw yet another rejection at wedge resistance, but the 21EMA (w) around 419.33 has been successfully defended since it was recaptured in May 2020, and as long as this support holds, we're going to continue to melt higher. Having said that, we just saw 6 months straight of gains on the SPY, and imo we're unlikely to see a 7th given the macros, low liquidity, heavy geo-political risks, and policy risks that are looming this month. I believe the finish line is (finally) in sight. The US10Y yield continues to slip after the 200DMA rejection at 1.41%. We've now lost weekly MA supports as well, including the 100MA (w) at 1.1988%, and the, 50MA (w) at 1.1961%, and absent a recapture by EOW, we could to be on the verge of a massive puke toward the August 2020 lows around .50%. The last time this happened, of course, was February 2020 just before the 35% market crash. Let's see if history rhymes. After a solid rejection at wedge resistance, the dollar (DXY) saw notable support at the 50MA (w) around 91.70, and is hovering just above around 92 as we approach the open. If sentiment is in fact about to shift negative, the dollar may be in the midst of a technical retest of the 50MA (w), before setting up for a retest of the wedge once again. Let's see if the bulls can defend the 50MA (w) into the weekend. In volatility, the Vix has been making higher lows for 6 weeks in a row, and is sitting at a 19 handle ahead of the cash open. The descending trendline is still holding as resistance for now, but judging by the stochastic RSI on the weekly time frame, and the PA off recent multi-year ascending trendline support, we're likely at the onset of another major spike in the Vix. First, we'll need to see the 25 level captured on the weekly candle, which would set us up for a second leg higher toward the upper band of the ascending channel around 50. Have a great day of trade, my friends, and let's see how the cookie crumbles this week. Cheers! Michael. * I am/we are currently long UVXY, HUV.
AMEX:SPYShort
by Hedge_Of_The_World
15
How Central Banks Are Stealing Your MoneySince the merger between the Fed and the Treasury (kidding, kind of), I've had so many conversations with individuals outside of the financial industry who struggle to fully grasp how central banks are stealing their money. Today, I'm going to share a short and simple post which I hope will help explain the direct effect of "money printing," on the working class. Let's jump right into it. When interest rates remain low for an extended period of time (historically), risk assets become more prone to rampant speculation (lucky for those holding assets outside of cash), leading to massive distortions in the underlying fundamentals of those assets, and historical valuation deviations from the mean (which is mathematically unsustainable). The rapidily rising prices of both assets, and goods & services, which is not being stimulated by an actual increase in the velocity of money, but rather from central banks artificially flooding the monetary system with liquidity (while interest rates are near zero), contributes to a lower standard of living for those holding cash as their primary asset. For example: If you have $100 in your bank account, and perhaps this is your only asset, then the central bank increases the money supply by 25%, what they've just done is increase the denominator which underpins the value of that $100. Here's a simple logical demonstration: 100/100 = 1 (baseline purchasing power.) 100/125 = 0.80 (a 25% increase in the money supply in this example, as a result of central bank money printing, results in a 20% loss in purchasing power.) In essence, in this hypothetical situation, you've just lost 20% of your purchasing power. With CPI in the US running at 5.4% YoY vs the Fed's 2% "target," we're currently looking at an inflation rate almost triple the Fed's goal. The US10Y yield trades at 1.25% while CPI is 5.4%, and the Fed continues to print $1.44 Trillion on an annualized basis, with no end in sight. Welcome to the wonderfully horrific world of Modern Monetary Theory (MMT). Anyone looking for a hedge?
NASDAQ:TSLAEducation
by Hedge_Of_The_World
13
Growth expectations falling as real yields are dropping?With inspiration from the Financial Times: www.ft.com 10-year inflation expectations(T10YIE) are stable while the US 10 yield (US10Y) and 10-year TIPS (treasury inflation-indexed security, DFII) are falling. This means that real rates are dropping as they are calculated as the nominal rate (US10Y) minus inflation expectations(T10YIE). The Financial Times argue though that as Gold is strongly inversely correlated to 10-year TIPS it should rise to 2100 from 1800 where it is now and that real yields therefore are somewhat imaginary.
FRED:T10YIE
by lucky_human_foot
Global Futures Extend Friday's Losses, Vix up 17%Here we go, folks! After an ugly opex on Friday which saw 30% of SPY, QQQ, IWM, and SPX options expire, leading to heavy selling across the board, futures are extending losses on Monday morning. As of 9AM, the S&P is down -1.21% to 4,266.12, the Dow is down -1.44% to 34,067, the Nasdaq is down -0.95% to 14,532, and the Russell is down -2.22% to 2,113. European and Asian markets are also taking it on the chin with the Dax down -2.62%, the CAC40 down -2.44%, the FTSE 100 down -2.13%, the Nikkei 225 down -1.28%, and the CSI 300 down -0.39%. It doesn't look like anyone can hide from the risk off theme today. As you can imagine, risk protection is in high demand with the Vix up 16.86% to 21.56. We're back at the 200DMA around 22, and we look poised to test trendline resistance around 24 as early as today on a break above the 200MA. Based on recent Vix price action after seeing solid support at the multi-year ascending trendline (around 15), we may be looking at the beginning of a larger repricing of risk off the back of higher than expected COVID infection rates last week, as well as growing inflation fears. Here's hoping logic works it's way back into the market going forward (finally). The US10Y yield is puking to 1.225% - we just lost the 200DMA at 1.275% and we're racing toward the 100MA (w), where the 50MA (w) is about to converge, around 1.20%. We should get support here, however, investors seem to be flocking into bonds as a safe haven against downside. The more shaky equity markets become, the more we may see yields crash, at least initially. Bitcoin is back at 30k support, but we're down over -3% on the day, and may be about to lose support, taking us toward 20k, which I believe is the 100MA (w). As risk is repriced, of course we'll see crypto sell off. It's only a matter of time before debt starts to pull flows away from assets, and those with the highest beta, and weakest value proposition, will be hit the hardest. Finally, the dollar (DXY) is retesting wedge resistance again for the 5th time in a month. We're sitting at 92.88 and we're fast approaching the March 2021 high's around 93.30 opening the gates to the upper band of the wedge around 95-96. Things are getting interesting so stay tuned for our live analysis at 9:30AM.
TVC:VIXLong
by Hedge_Of_The_World
4