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US 10Y TREASURY: pricing the PCE easingThe inflation measured through the Personal Consumption Expenditure Index showed signs of further decrease in August. The Index was standing at the level of 2,2% on a yearly basis, which was a bit lower from market expectations. The US Treasury yields eased after the release of data, bringing the 10Y US benchmark to the level of 3,75% as of the end of the week. During the first half of the week, the 10Y yields were exploring higher grounds, reaching the highest weekly level at 3,82%. At the same time, released final GDP Growth data for Q2 showed no changes on a quarterly level of 3% growth, which pointed to investors that the US economy was growing in a moderate pace in the environment of high interest rates, and that further drop in interest rates will be supportive for the boost of the economy in the coming period. Current charts are pointing to a probability for further easing of the US yields in a week ahead. The non-farm payrolls are set for a release, which might bring back some modest volatility on the markets. Still, some significant moves in yields should not be expected. The levels around 3,7% might be tested in the week ahead.
TVC:US10Y
by XBTFX
U.S. Dollar Index is near to fall. Soon..The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against basket of other six major currencies, extends its losses for the 5th consecutive week in a row, hovering below 102 points during the U.S. regular hours on Monday, August 19. Over the past week, Gold spot (XAUUSD) has topped $2500 per ounce psychological high also, minting new all the history peak, while Forex Eur/Usd (EURUSD) pair just has flashed a positive 2024 YTD return, jumping above 1.10 psychological degree. The US Dollar continues to weaken following dovish comments from Federal Reserve (Fed) officials, which have increased a new portion of expectations for an interest rate cut by the central bank in September. Furthermore, last week’s US economic data revealed that both the Producer Price Index (PPI) and Consumer Price Index (CPI) suggest that inflation is easing. Federal Reserve Bank of San Francisco President Mary Daly stressed on Sunday that the US central bank should adopt a gradual approach to lowering borrowing costs, according to the Financial Times. Daly countered economists' concerns that the US economy is facing a sharp slowdown that would warrant rapid interest rate cuts. Additionally, Federal Reserve Bank of Chicago President Austan Goolsbee cautioned that central bank officials should be careful not to maintain a restrictive policy longer than necessary. Although it's uncertain whether the Fed will cut interest rates next month, failing to do so could negatively impact the labor market, according to CNBC. Additionally, the decline in the US yields contributes to downward pressure for the Greenback. 2-year and 10-year yields on US Treasury bonds stand at 4.05% and 3.85%, respectively, at the time of writing. This week, all eyes will be on Federal Reserve Chair Jerome Powell's upcoming speech. In a bottom line, the major technical graph for the US Dollar Index (DXY) indicates on possible huge decline for the next upcoming 12 to 18 months. The secondary RSI(14) graph indicates also, the bearish sentiment prevails.
TVC:DXY
by PandorraResearch
US10Y Look for a 1D MA50 rejection.A month ago (August 21, see chart below) we argued why the U.S. Government Bonds 10YR Yield (US10Y) would go lower with the Fed having no choice but the cut the Interest Rates: Well the Fed did it and cut the rates not just by -0.25% but -0.50%, initiating the new cut Cycle. Now let's look at the US10Y's price action on a smaller time-frame, namely the 1D. As you can see the pattern is a double Channel Down, with the price trading below the 1D MA50 (blue trend-line) since July 03 2024. That is the current Resistance and until it breaks (1D candle closing above it), we should be looking every time for a sell near it. Assuming the Bearish Legs of the diverging (dotted) Channel Down are symmetrical like those of May and June, our Target is 3.450%, representing a -10.50% decline (same as August's Bearish Leg). ------------------------------------------------------------------------------- ** Please LIKE 👍, FOLLOW ✅, 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 us, keep the content here free and allow the idea to reach as many people as possible. ** ------------------------------------------------------------------------------- 💸💸💸💸💸💸 👇 👇 👇 👇 👇 👇
TVC:US10YShort
by TradingShot
US 10Y TREASURY: surprising 50 bps cutAlthough markets were divided on whether the Fed will cut interest rates by 25 bps or 50 bps at their September meeting, still, the Fed brought some sort of surprise by cutting interest rates more aggressively, by 50 bps. Considering Fed's dual mandate, to keep inflation at targeted levels and a stable jobs market, the analysts are now noting that, with the latest rate cuts, the Fed switched attention to the US jobs market. The US yield reacted to the Fed's decision in a mixed manner. Still, the 10Y US yields turned to the upside, despite Fed Chair Powell's comment that more rate cuts are coming till the end of this year. The 10Y US yields reached the lowest weekly level at 3,6%, and soon reverted to the upside, ending the week at the level of 3,74%. While digesting Feds comments, the market is currently seeking an equilibrium level for the US yields. Based on current sentiment, there is some probability that yields might shortly revert back toward the level of 3,8%. However, on a longer time scale, the trend for 10Y US yields is on the downside.
TVC:US10Y
by XBTFX
Nasdaq-100 Index. The Psychological Aspects of Round NumbersIn the complex dance of commerce and finance, price tags play a key role in influencing consumer decisions. While it’s a fairly common psychological assumption that every penny and cent counts when it comes to getting the best deal, human psychology often deviates from this linear logic. In this educational post, we explore the irresistible appeal of round numbers, and how they often trump other considerations when making transaction decisions. The Irresistible Attraction to Round Numbers We do often believe that every penny counts in our transactions. However, research shows a striking deviation from this assumption. In scenarios where people choose a price, such as tipping at a restaurant or donating to beloved author or website, they disproportionately choose round numbers — like $ 5, $ 10 or $ 20 — far more than would be predicted by chance alone. One could argue that this is due to the rejection of change, a reluctance to waste time on small change, and the unwillingness to bother with complex mathematics. However, even in cases where the exact bill is not an issue (e.g., cashless card payments), the preference remains. For example, diners faced with a non-round bill (for example $ 34.67) are more likely to give non-round tips ($ 15.33), but only so that the total is a neat round number ($ 50). Why do we prefer round prices? And what is the psychology behind it? 1) Cognitive simplicity: The human mind is programmed to simplify and seek simplicity. Numbers like 10, 50, or 100 inherently feel “cleaner” and less chaotic than 17, 62, or 84. This desire for neatness gives us a sense of accomplishment. 2) Perception of quality: The marketing world has long capitalized on this preference for round numbers. Brands strategically associate round prices with premium quality. On the other hand, odd prices like “29.99” or “34.99,” while ubiquitous, subconsciously signal here's a discount or a bargain. 3) This preference is not limited to prices. People exhibit this tendency to round in other aspects of life as well. Our repeated exposure to round numbers is common in a variety of contexts, both in everyday life and during financial transactions, which contributes to an unconscious bias toward them. This cognitive ease with round numbers further perpetuates the preference. The stock market’s behavior and its fluctuations around these significant, round numbers is not a coincidence in general; there is a psychological explanation. Market Psychology of Round Numbers When the market reaches round numbers such as 500 or 1,000, 2,500 or 5,000, 10,000 or 20,000, it attracts the attention of both active traders and casual investors who may not even be actively following the market. As in everyday life, people often use round numbers as thresholds for making investment decisions. For example, some may decide to enter the market if a major index such as the Nasdaq-100 has exceeded 10,000, or they may decide to sell some of their stocks if the Nasdaq-100 has reached 20,000. These round numbers act as magnets for sellers as they mark important milestones given the relatively high rarity of a round number. If the market has the potential to move higher, it first needs to absorb the selling pressure around the round numbers and establish equilibrium before continuing its move higher. If we analyze the market behavior over the last decades, we will see clear patterns at round numbers. Let us take a closer look at a few examples. 1) Indian Stock Index, Sensex BSE:SENSEX Sensex, one of the major market indices in India, has its share of round number syndrome. For example, when Sensex reached 10,000 points in Q1 2006, it experienced significant market activity, with the index fluctuating by as much as 30 percent in Q2. The same phenomenon occurred at multiples of 10,000. Thus, at 20,000 points, which the Indian market reached at the end of 2007, the index collapsed by more than 60 percent over the next 4 quarters of 2008. Later the 20,000 mark has been reached again in the second half of 2010, and the index again suffered a decline of more than 20 percent during 2011. Later Indian stock market index reached the 30,000 mark in the first quarter of 2015, and its led to a price decline of more than 20 percent in the next 4 quarters, while 40,000 mark in the fourth quarter of 2019 - led to the market decline by 30 percent on the wave of COVID-19 sales. 2) Gold market OANDA:XAUUSD As in the previous example, round numbers often become key points of congestion for Gold market, when the market tries to break even higher, but the forces of buyers and sellers may be unequal. For example, spot Gold reached the $ 1,000 mark for the first time in the Q1 2008, which, following the logic discussed above, led to sales and 30 percent decrease. Gold spot buyers have tried a lot to reach $ 2,000 mark in 2011, but it brought the market down by 45 percent over the next 5 years. There were also a lot of unsuccessful attempts to jump above $ 2,000 in 2020-2022. Finally Gold spot surged above $ 2,000 only in Q4 2023, its led to further price increase, up to 2500 US dollars per ounce. 3) US stock index, Nasdaq-100 index NASDAQ:NDX The Nasdaq-100 index approached the 10,000 point mark for the first time in Q1 2020, which could have contributed to the sell-off. In fact, this is what happened, as the market then plunged by more than 30 percent in March 2020, and only thanks to monetary support measures and the reduction of US interest rates to almost zero, the index was able to break the 10,000 barrier by the end of Q2 2020. Reaching the 20,000 mark by the market index in Q2 2024, as we see, again leads to increased turbulence in US tech stocks and talk of imminent monetary easing by the Fed. Final Thoughts 1) It is important to note that round number syndrome and increased seismic activity near rounds number is a short-term phenomenon. Once the selling pressure is absorbed, the market resumes its movement based on other factors and develops independently of these already passed milestones. 2) Understanding the market behavior at round numbers can provide valuable information to investors. These round numbers act as psychological triggers for investors, driving their decision-making processes. 3) Understanding this phenomenon allows investors to make more informed choices and understand the short-term fluctuations that occur during these stages.
NASDAQ:NDXEducation
by PandorraResearch
US 10Y TREASURY: Fed on the moveThe US inflation data, posted during the previous week, clearly showed that the inflation in the US is slowing down. It is still above the Fed's target of 2%, but it opens the space for the Fed to cut interest rates. Markets are almost sure that the first rate cut will occur at September's FOMC meeting, which is scheduled for September 19th. The market positioned itself in accordance with expectations during the previous weeks, by decreasing yields on the US Treasury bonds. The 10Y US Treasury benchmark reached the lowest weekly level at 3,61%, still ending the week at 3,65%. Considering that the FOMC meeting is scheduled for the week ahead, some increased volatility could be highly expected. The 10Y Treasury yields might oscillate a bit up to the levels around 3,70%, looking for an equilibrium. Fed Chair Powell’s rhetoric after the meeting would shape the investors sentiment, in which sense, some higher movements might be possible. Still, on a long-run, the interest rates and yields would certainly trade with a clear downtrend.
TVC:US10Y
by XBTFX
US 10Y TREASURY: NFP implied yieldsFriday was the major trading day on the US financial markets, after the release of jobs data for August. The US nonfarm payrolls came weaker than market was expecting, which implied market higher volatility. The nonfarm payrolls came at the level of 142K, while the market was expecting to see 160K for the month. On the positive side was a modest decrease in the unemployment rate from 4,3% to 4,2% in August. Such weak figures were an indication to markets that the Fed might need to cut interest rates at least by 50 bps in order to support the economy, which might be potentially entering into a recession. Of course, the US economy is still holding in a relatively good shape, where relatively weaker jobs figures should be taken with a reserve. The 10Y Treasury benchmark was pushed to the downside, reaching the lowest weekly level at 3,65% at one occasion at Friday's trading session. Still, yields are ending the week at the level of 3,71%. The week ahead will be used by investors to digest the latest jobs data and reassess their positions accordingly. In this sense some adjustments in yields are possible to the upside. The level of 3,8% might be tested for one more time.
TVC:US10Y
by XBTFX
Hmm... Something Interesting & Sweet is Brewing in T-Bond MarketIEF is a longer maturity, longer duration play on the US Intermediate Treasury segment. The fund focuses on Treasury notes expiring 7-10 years from now, which have significantly higher yield and interest rate sensitivity than the notes that make up our broader 1-10 year benchmark. IEF`s average YTM is significantly higher than US-T Aggregated benchmark's. Of course, the higher yield comes with significantly higher sensitivity to changes in rates, particularly those at the longer end of the yield curve (10-year key rate duration). The fund changed its index from the Barclays US Treasury Bond 7-10 Year Term Index to the ICE US Treasury 7-10 Year Bond Index on March 31, 2016. This change created no significant change in exposure. IEF's narrow focus and concentrated portfolio have been popular, so the fund is stable and easy to trade. The main technical graph represents IEF' Total return (div-adjusted) format, and indicates on developing H&S structure, as US Federal Reserve tight monetary policy seems is near to ease.
NASDAQ:IEF
by PandorraResearch
Head & Shoulders pattern: 10 year yield could drop to 2.87%The series of tops shaped notorious Head & Shoulders pattern on 10-Year Treasury yield (TNX). The tallest peak is the Head and Shoulders are on both sides. The Neckline is the support that is built through valleys of the Head. The price has breached the Neckline this summer triggering the pattern bullish scenario. The target is calculated by subtracting the height of the Head (from top to Neckline) from breakdown point on the Neckline. It is located around 2.87%. Almost 1% down from the current level
TVC:TNXEducation
by aibek
Gold predicting that Big falling rates cycle has almost overThere are several factors that can drive gold prices up in long term. Some of the key factors include: 1. Global Economic Uncertainty: Gold is often seen as a safe-haven asset during times of economic uncertainty or market volatility. Investors tend to flock to gold as a store of value when traditional investments like stocks and bonds are perceived as risky. 2. Inflation: Gold is often used as a hedge against inflation. When inflation is high and inflation expectations are going even higher, the purchasing power of fiat currencies decreases, leading investors to turn to gold as a way to preserve their wealth. 3. Geopolitical Tensions: Political instability, conflicts, and geopolitical tensions can also drive up gold prices. In times of uncertainty or conflict, investors may seek the safety of gold as a reliable asset. 4. Central Bank Policies: The monetary policies of central banks, such as interest rate decisions and quantitative easing measures, can impact gold prices. While investors thoughts that lower interest rates and expansionary monetary policies tend to be supportive of higher gold prices are widespread, in reality - higher due to inflationary concerns interest rates are more supportive for gold prices. 5. Demand and Supply: Like any commodity, gold prices are influenced by supply and demand dynamics. Factors such as jewelry demand, industrial demand, and gold production levels can all impact the price of gold. These are just a few of the factors that can drive gold prices up. It's important to note that gold prices can be influenced by a wide range of economic, geopolitical, and market factors. The main Graph is an Annual chart for ratio between Gold prices in US Dollars (XAUUSD) and US Inflation (USCPI). In technical terms this graph indicates that 40-years deflationary plateau, and monetary cycle of falling USD rates has almost over, while due to mentioned above reasons, Gold can start its ride to outperform inflation within many upcoming years.
OANDA:XAUUSD
by PandorraResearch
US 10Y TREASURY: adjusting for a rate cutAfter Powell`s the “time has come” for the Fed to pivot, and the latest PCE data, markets were adjusting their expectations for the level of Fed's rate cuts in the coming period. The Julys PCE data came surprisingly lower from market expectations, of 2.5% on a yearly basis, compared to 2.6% expected by markets. At the same time, investors are considering both personal income, which was higher by 0.3% in July, and personal spending which was higher by 0.5% for the month. The 10Y treasury yields started the previous week around 3.78%, however, they are ending it at 3.90%. Highest weekly level was 3.92% on one occasion. The week ahead might also trigger higher volatility. The Non-farm Payrolls and Unemployment Rate for August are scheduled for a release, where any surprises might induce higher market moves. However, at the current point, there is some probability that the level of 4.0% might be tested, but not higher grounds. There is also a potential for a short reversal, but not too lower from current levels.
TVC:US10Y
by XBTFX
US 10Y TREASURY: “time has come” for 25 or 50 bps?The “time has come” for the Fed to pivot. This was the note from Fed Chair Powell at the Wyoming Jackson Hole Symposium, and was the note that the market was waiting for a long time to hear. Current market expectation is that the Fed will make its first cut in September, however, the question that is currently occupying Wall Street is whether it is going to be 25 or 50 basis points? Fed Chair Powell did not make any comments on when the rate cut will happen or what would be the scale of the rate cut. The 10Y Treasury benchmark started the week around the level of 3,9%, and ended it at 3,79%. The market has priced the first rate cut in the coming period, as announced by Powell. During the week ahead, there might be some lower volatility between 3,8% and 3,9%, however, on a long run, the yields will certainly eye the downside.
TVC:US10Y
by XBTFX
US10Y going lower with the Fed having no choice but to cut.Almost 10 months ago (November 7 2023, see chart below), we made a bold (for the time being) call on the U.S. Government Bonds 10YR Yield (US10Y), as against the prevailing market sentiment we gave a sell signal, right after what turned out to be a top: Today's revisit to this pattern shows that the 1M RSI Lower Highs have already started to form a Bearish Reversal on the US10Y price, similar to 2006 - 2007. We are expecting to hit the 0.382 Fibonacci retracement level at 2.100% as its first Target, on the Fed's first wave of rate cutting and gradually hit the lower Fib targets as the rates stabilize. For better illustration we have plotted also the U.S. Interest Rate (red trend-line), where you can clearly see that the fractal we compare to today, is right before cuts started in August 2007. Also it is a natural consequence of US10Y falling when rate cut cycles start, evident also in June 2019, December 2000, May 1995, May 1989 September 1984, May 1981 etc. ------------------------------------------------------------------------------- ** Please LIKE 👍, FOLLOW ✅, 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 us, keep the content here free and allow the idea to reach as many people as possible. ** ------------------------------------------------------------------------------- 💸💸💸💸💸💸 👇 👇 👇 👇 👇 👇
TVC:US10YShort
by TradingShot
1
JPY, key to all other indexesJPY vs USD, key to the other index developments. As long as it holds its trendline, JPY will remain week vs the other global currencies, Japan exports will hold, carry trade arbitrages won't unwind, US bonds will not sell off (rising yields), volatility will remain contained. But if it breaks and doesn't hold the 139JPY/$, we could witness how algos start dumping US and Euro shares and bonds. Rising JPY should also affect the Nikkei 225, retaking the path to 30k
Short
by j_arrieta
2
US 10Y TREASURY: Fed`s cut is nearingThe posted US inflation for July brought some new confidence for investors that the Fed's rate cut is nearing. The July inflation eased to the level of 2.9% on a yearly basis, and was below market forecast of 3.0%. The Producers Price Index was another indicator which pointed to further easing of inflation pressures, by reaching 0.1% in July, for the month, again below market estimate of 0.2%. To nail the market expectations, preliminary Michigan Consumer Sentiment, posted on Friday, showed no change in inflation expectations for the five years period of 3.0%. This was enough information for the market participants to increase their expectations that the Fed might make their first rate cut in September. The 10Y US Treasuries started the week modestly below the level of 4.0%, and were driven to the downside during the rest of the week. Yields reached the lowest weekly level at 3.8%. Thursday and Friday brought back some short volatility, after the Retail Sales data were posted, however, yields are finishing the week at the level of 3.88%. During the week ahead the Jackson Hole Symposium will be held on Thursday and Friday. After the symposium, Fed Chair Powell will hold a speech, which might bring back some volatility to the market, considering current nervousness around rate cuts. Still, it is not expected that the yields will move significantly to either side, except to test, for one more time the 3.8% level.
TVC:US10Y
by XBTFX
US 10Y TREASURY: easing with rate cutsTwo weeks ago markets reacted to surprising jobs data in the US, however, the posted ISM Services PMI on Monday put a dose of relaxation among market participants. Data showed that the US is clearly not in a recession and that, at least, the services sector is doing fine at this moment. All financial markets were traded in a positive manner during the previous week, resetting their sentiment to the previous path. The US Treasuries also re-adjusted during the week, in a move from 3.7% reached on a Monday, till 4.0% reached on Friday. The 10Y benchmark is finishing the week at the level of 3.94%. Regardless of a positive come-back and re-assessment of the current state of the US economy, the market nervousness might continue in the coming period. It should be considered that the US inflation data and the retail sales for July will be published in a week ahead, where some increased volatility might be possible for one more time. At the current stage, the market is testing the 4.0% level, however, there is some probability for another drop in the week ahead. The level of 3.9%, eventually 3.8% might be tested. The move above 4.0% is unlikely at this moment.
TVC:US10Y
by XBTFX
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.
TVC:US10Y
by XBTFX
Money Market says that rate cut will be an urgent one (again)Just take a look on a rate cut expectations. In a short, the main technical graph is a difference (spread) between the nearest futures contract on FOMC interest rate (in this time Sept'24 ZQU2024) and the next one futures contract (in this time Oct'24 ZQV2024). It's clear that spread turned to negative in 2024, and heavily negative over the past several weeks. Historical back test analysis says that in all of such cases, FOMC is to cut interest rates immediately. The next scheduled FOMC meeting is September17-18. Will the market wait 6 more weeks? The right answer: NO. Rate cut will be an urgent one (unscheduled again).
CBOT:ZQ1!
by PandorraResearch