US 10-Year Notes - LONGI've been loading on these like crazy, all day long.
Yields have peaked, by any measure. Also, the inevitable - continuous - U$D buying can't help but push these higher.
The Yuan/Rubble based trade, while present, is miniscule and capital isn't exactly flowing into mainland China. No one trusts the Chinese and the Russo-Chinese alliance is about as stable as a floating dice game. Hence, the Chinese central Bank's insane gold buying spree despite which gold prices couldn't muster more than an intra-day all time high, lasting all of 5 minutes.
All U$D, all day long.
Ustreasury10years
FED Fund Rate, US Bonds and Inflation PredictionThe blue line area shows the historic and current FED's Fund Rate.
Looking back in the past it appears the US10Y (yellow line) is predictive of FED's fund rate upper target (orange arrows).
The US3M (turquoise line) seems to be a good indicator to get a feeling for the FED's fund rate short-term up or downward trend.
In the FOMC Summary of Economic Projections Jun 15 '2022 the FOMC had the midpoint of target range or target level for the federal funds rate at around below 4%
2022: 3,39% midpoint, 2023: 3.78%, 2024: 3.01% and >2024: 2,24% (ghost feed in the red box on the right).
So all that noted it would appear the FED Funds rate is to be expected at just below 4% at around 3.8%.
The next FOMC meeting will give as an update on that from the perspective of the FED.
And as a general indicator you need to know the FED uses the 10 Year- 3 Month Treasury Yield Spread (white line) as follows:
The 10 Year- 3 Month Treasury Yield Spread is the difference between the 10 year treasury rate and the 3 month treasury rate.
This spread is widely used as a gauge to study the yield curve. A 10 year-3 month treasury spread that approaches 0 signifies a
"flattening" yield curve. Furthermore, a negative 10 year-3 month spread has historically been viewed as a precursor or
predictor of a recessionary period. The New York Fed uses the rate in a model to predict recessions 2 to 6 quarters ahead (white arrows).
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Trend Reversal in US 30 Years Bonds? Investment Opportunity?A longer term look at the US 30 Year Bonds reveals that the yields have broken to the upside of 2 standard deviation of the linear regression channel.
In a way bonds have already executed the FED rate hikes.
You can get around 3% yield on a US 30 year bond.
Question is if the bond market will track lower increasing yield rates even further.
Depending on your investment strategy this may be worth considering.
I am still puzzled why not more money is not pouring into USD stablecoins as one get get e.g. 15% yield with UST on Nexo.
That appears to be a no brainer, still there is some risk associated with the platform, but not too much more then with a bank.
In any case US bonds are attractive assuming the FED will eventually be forced to pause rate hikes.
Then a 3% yield with a potentially rising bond is a sweet deal.
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US GOV BONDS 10 YR YIELD - M1 ---> D1Good morning, today we are going to look at 3 time frames, beginning with :
MONTHLY
September monthly closing level is showing a failure to close above the ongoing downtrend line resistance.(1.5570).
Interesting to note that the September intramonth high (1.56) was slighly higher than the 61.8% Fib ret @ 1.5270
(1.7740-1.1270 move).
So for the time being recent price action was only a corrective move.
October monthly closing level will validate or invalidate a potential breakout of this important downtrend line resistance.
WEEKLY
This week ongoing price action is, for the time being, showing also, a failure to clearly breakout the W1 downtrend line resistance.
Important support levels on a weekly basis @ 1.4360 ahead of 1.3950; a failure to hold above this area would open the door for lower
levels, towards 1.3440 (W1 top clouds) ahead of 1.25
Wait the weekly closing level for confirmation.
DAILY
Recent price action seen over the last couple of days, is also showing, for the time being, a breakout failure to crossover the daily downtrend line resistance
and hold above it !
Looking forwards, I strongly suggest to look at the following levels :
Support area :
1.43 - 1.38
A failure to hold above this zone would put the focus on the daily clouds support 1.35-1.27
Resistance area :
On the upside, as above mentioned, a breakout and daily closing level above the ongoing downtrend line resistance (currently around 1.52), would be the first significant
warning signal for a trend change (from a SELL on rally to a buy on dips) in watching carefully the following price action, if the breakout occurs.
Be careful, on pullback (bull "yield" trap !!)
Have a nice day
All the best
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Ironman8848