Chart of the day: Surprising push lower in US10Y continues...The recent economic data out of the US was nothing short of spectacular, with ISM Mfg PMI printing at the highest level since 1983, with NFP showing close to a million jobs gained in March and ISM Services PMI printing the highest number going back as far as our dataset allows.
These types of numbers were a very good example of the type of solid economic beats that market participants are expecting going into Q2. It’s also solid prints like these that are expected to see US10Y pushing higher.
However, despite the data, US10Y has been pushing lower over the past few sessions, currently meandering close to the next key area of support between 1.60 – 1.62.
So, what to make of this drop in US10Y? For now, not much as the med term bias remains tilted to the upside for yields, especially going into the second quarter of the year. What would change that med term view?
Firstly, a drastic deterioration in the actual Q2 data which sees the market second guess it’s baseline assumptions. Secondly, a drastic deterioration in the virus situation, bad enough to overshadow the current flurry of positive drivers in the market right now.
Thus, the expectation for higher yields in the med term remains intact and we are looking at key support zones (1.60 – 1.62 and 1.50 – 1.52) as possible areas where we could expect med term bond sellers to step back in.
Us10yr
Monthly Chart of US 10 Year Bonds:As seen from the chart the bond is facing resistance around the downward sloping trend-line since 1988.
At present, the bond is trading near to trend-line supply zone around the levels of 1.90 to 2.00
Around 1.80 levels lies the 50% Fibonacci levels of entire downward movement from 3.25 to 0.36.
For educational purpose
@jagrut
Chart of the Day: US10Y mean reversion in full swing but...US10Y mean reversion in full swing but keep bigger picture in mind.
We do not expect an exodus en masse for US treasuries after the announcement that the SLR relief was not to be extended. The reason for that was twofold.
Firstly, it was the calming comments from multiple and highly respected analysts in the fixed income space who explained that the impact on market functioning might not be as big as some had initially feared.
Secondly, positioning always played a huge part in this with primary dealers already shedding more than $80 billion in treasuries going into the FOMC meeting in anticipation of the SLR relief not being extended.
The most important thing to keep in mind right now is the bigger picture, where the med term bias for US10Y still remains titled to the upside. That means keeping a very close eye on the key support to the downside will be very important.
Both the 1.60% and 1.50% level are the obvious support areas where we would expect the bond sellers to lean back into and push US10Y higher again. This will be very important due to the strong inverse correlation between US10Y with GOLD and JPY as well as the positive correlation with the USD.
Any signs that the 1.60% is holding would still be considered as an opportunity to look for USDJPY upside from a med term perspective so keep that on your radar.
US GOVERNMENT BONDS 10 YR YELD GROWINGBond markets have experienced a strong movement this week with the U.S. Federal Reserve saying it expects higher economic growth and inflation in the United States this year, although it repeated its pledge to keep its target interest rate near zero. Yields on U.S. 10-year have been rising for the past seven weeks on growth expectations, spiked to their highest since January 2020 at 1.754% on Thursday. They eased to 1.6838% on Friday.
The SEB analysts said they expected the U.S. 10-year Treasury yield to hit 2% this year
US10Y: U.S. 10 Year Treasury (Does inflation eat money?)There are two channels in a row on the chart. One of them is the Fibonacci Channels, while the horizontal ones are the Fibonacci Retracement.
The overlapping point of these two channels is 1.93% and we predict that we will reach this point in a short time.
Of course, we don't say this just by looking at the lines on the graph. With the latest incentive package, the money that will flow to the markets is obvious, and everybody says that inflation is coming. Growth in the US will be very strong, and this will inevitably result in deferred demand turning into a buying act ...
It contains only personal views and opinions. Does not contain legal investment advice ...
From US10Y yield to Gold and NQ(sensitivity & 6-month time lag)Alright, I think people are tired of US 10Y yield, but my analysis revealed that gold is more sensitive to US 10Y yield than NQ. In addition there is a half-year time lag. If you're interested, could jump to the end of my video. Some highlights are as below:
1. The new range of US 10Y yield(1.5% - 2%)
2. NQ bullish setup review(risk & return) and the benefit of trail stops by using short-term MA.
3. Why a bullish and bearish gold setup after key zone violation? How to reduce trading risks by price action?
4. Why gold started to drop since Aug.8th 2020 ? How the date correlate with US 10Y yield?
5. The correlation between NQ and Gold and why do they move in the same direction sometimes?
Feel free to share your thoughts, and don't hesitate to give me a like if you like the video!
10Y US Government Bond vs Gold10Y US Government Bond reached an important decision and supply area, where bears can trigger the control again, boosted by ultra dovish FED. By technical side the RSI is overbought on the weekly timeframe, and the course is currently at a massive resistance + previous low + fibonacci retracements (61.8-78.6) + under/at 200 EMA, which shows dowside as well. I am waiting a lower high, and a counter trend break soon with a hidden weekly rsi divergence. Based on these, precious metals can shine again soon, it is time to reload long positions in the related assets.
Is US10Y Yield going up?Hi there, as I draw, in my idea the US10Y Yield will rise till the level 1,68, I put the stop as a red line, as you see many levels form that triangle that ends to the resistance of February 2020.
I drawed green lines to support the rising, as you see the week ends, using that line as support, maybe because is slowing down from the 1,5% peak, but well it didn't go far away from that layer.
Using the bottom from March there is a projection that i draw with the blue dashed line, but in my opinion is weaker than "the yellow pattern".
I tried to figure out a trend myself
Let me know your opinion about.
Thank you :)
New Range of Gold, US 10Y and next possible moves!In this video, I reviewed the price move of gold and identified new zones for gold. Some highlights are as below:
1. The relationship between US 10Y yield and gold
2. New range formation and why?
3. How to trail your stops on smaller TF and pattern you need to pay attention to
Gundlach ratio suggests 10 Year Yields will continue to climb. The Gundlach ratio tracks the ratio of copper prices to gold as an indicator of future US 10 Year Yields. Gundlach believes in the predictive value of the ratio since copper is sensitive to swings in the economy, while gold climbs when investors get frightened. You can see the correlation with the US 10 Year Yield rate is around at least 95% most of the time, although the correlation does loose connection, but then returns.
Copper has been on a tear (especially since the Chinese returned from their Lunar Holiday) hitting a most recent high of 4.18 per lb, while Gold has dropped below $1800, bottoming at 1760 at the prospect on real yields becoming positive. This has increased the Gundlach ratio and you can see how US10Y rates have also been driven higher.
With copper forecast to go even higher and Gold's future potentially a little less certain (especially as funds are diverted to Bitcoin) this bodes well for future higher 10 year rates.
INTEREST RATES - Tracking Minor Waves - Wave iv of Wave 5Just following on from my 10 bond yields idea back in November - Ideas linked below in related ideas.
AriasWave just keeps getting better and better so now we have a stack of evidence telling us when the show will end.
Below I will link ALL RELATED IDEAS mentioned in the video.
THIS MARKET IS THE REASON WHY EVERYTHING IS THE WAY IT IS RIGHT NOW.
But all that will change soon and so will the world.
Not that it hasn't already. This is why I love the waves.
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ridethepig | Rate Differentials Pausing via Italian Politics 📌 ridethepig | Rate Differentials Pausing via Italian Politics
An important chart update here as we are talking "differentials" in the abstract concept of waves and TA.
We must first take notes of the previous leg which was the 1st wave and far from easy to spot, in the early game of rate differential turns, it takes a lot of energy to exploit one side the whole business involves activity. Think of the complicated setup, above the orderblock as a breakout, and remember we are playing a whitespace game!
On the other hand, operations on the FX board are quite simple and natural to follow. There have been some signs of a temp high cooking in EURUSD and with Italian politics entering back under the spotlight it will likely be used as a blockader. Remember ECB may, when the occasion demands it, possibly send forward false flags to clear the ground of infiltration above 1.25.
A pullback in rate differentials towards 1.25 will be enough to clear the board and by the apparently primitive sequence an ABC pullback should materialise. The pullback should cap the highs in EURUSD for now until the summer to gather energy before we can launch decisively higher.
Thanks as usual for keeping the feedback coming 👍 or 👎