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Government bonds

GB10Y - pensions at risk?Here show similarities of 2007, before the 2008 financial collapse! both show reaching their peak, pulling back then heading towards retracement level's. 2007 couldn't hold the 0.702 retracement, bond price reversed and took out the low's. 23/05/23. today we are heading for the same scenario! will be waiting to see if we can break and hold the 0.702, if not then I would expect the same pattern to play out. this would weaken pension's, the value of the pound and cause liquidity issues. BOE already said back in October 2022, that they would step in and double there purchase's, but this would be the last time. expecting more strength in the pound on the shorter timeframe, if we see another leg down from the DXY (US Dollar). Debt ceiling coming up June 1st. i think its likely they'll raise the debt ceiling. this will create more liquidity, plus inflation will start to creep up. may see more banking liquidity issue's banks balance sheets will be heavily leveraged in bonds/gilts. Uk may need to keep raising rate's against the falling pound. united states will have extra liquidity to bail out banks. (if they raise the debt ceiling) this is when i would expect stag-flation to occur, combination of pausing rate hike's, whilst also creating extra liquidity to support failing banks. interesting times ahead, will be looking at these resistance level's as an indication on what come's next for the pound!
TVC:GB10Y
by dibz1996
US 10Y TREASURY: 4% is far away?The US Treasury yields were under influence of Fed Chair Powell's speech in Washington as well as ongoing negotiations regarding the debt-ceiling. Although Powell did not mention anything new in his speech over a potential monetary move in the future period, still, Lorie Logan, a Dallas Fed President, made a comment as of the end of the previous week, that monetary data are still not justifying the halt in Fed's rate hike. Market reaction was imminent, so the 10Y Treasuries surged by 7 bps to the highest weekly level at 3.72%. Still, yields are finishing the week around short-term support at $3.6%. As long as insecurity in markets holds, and further rate hikes are not clearly communicated with the market, it could be expected for 10Y Treasuries to be elevated. The major resistance line at 3.6% has been breached on Friday. This means that the market will start week ahead by testing this level for some time. On the other hand, news on the debt-ceiling negotiations would certainly have an impact on Treasury yields, which might bring some volatility back on the market. On the opposite side, a clear break of 3.6% resistance has opened a way for a 4% next resistance. It should not be expected for this level to be reached in the week ahead, but in case that Fed continues with rate increases, a 4% might easily become the next target.
TVC:US10Y
by XBTFX
Towards 10.650%!?-If we take into account that we form a nice head and shoulders at the bottom of the pandemic, prices would certainly seek the region of 10.65% of the US government's 10-year bond. -If we consider the neck region as the starting point for tracing the fate of prices, we will have this bizarre thing happening, an explosion in "treasurys". -On the weekly chart we have a pivot high that wants to form and is targeting the most recent top at 4.350%. -Going down a little further, on the daily chart, the pivot that had formed on 05/12/2023 is about to reach the golden region of the FIB at 3,780%. -We have the long average right below, and it could serve as support. We have Congress about to approve the new limit for the spending ceiling and if it is approved, it may be necessary to raise interest rates again. -We have an unknown soon, which is: Will interest rates explode? -Do your analyzes and good deals. -Be Aware, If You Buy, Use Stop! -See below for other graphic reviews!
TVC:US10Y
by MacD_Bollinger
2
US10Y Still room to rise but be ready to short the top.The U.S. Government Bonds 10YR Yield (US10Y) hit the downside target on our previous signal (see idea below) and is currently rising again: Being above both the 1D MA50 (blue trend-line) and 1D MA200 (orange trend-line), we see the potential of a diverging Channel Down to emerge and establish itself (dotted lines). The completion of a 1D Death Cross, the first since August 25 2021, ensures that the long-term trend remains bearish. As a result, buy the rest of this bullish Lower High leg and be ready to sell again at the top of the original (blue) Channel Down. If the 1D RSI gets rejected on the dashed Lower Highs trend-line, consider the potential of an early top and sell again. Our target for end of July is 3.150%. ------------------------------------------------------------------------------- ** Please LIKE 👍, FOLLOW ✅, SHARE 🙌 and COMMENT ✍ if you enjoy this idea! Also share your ideas and charts in the comments section below! ** ------------------------------------------------------------------------------- 💸💸💸💸💸💸 👇 👇 👇 👇 👇 👇
TVC:US10Y
by TradingShot
British bonds smell of fried! Something bad is happening in the state market. bonds of England - these papers have been actively sold over the past month. During this period, the yield on them increased by as much as 1%. Because of this, we see how the market is already beginning to arrive in some kind of stress: the dollar index is growing, other bonds of developed countries are also being sold, because of this stress, gold also gets it, as central banks are forced to sell off reserves in order to support the nat. currencies and the bond market. Something suggests that panic-sells in risky assets may begin on the market very soon. This will hit equities hard and likely hit crypto hard too. Friends, it’s worth tying up with longs for now, and it’s even better to fix them in profit out of harm’s way. Clouds are gathering over risky assets, prepare umbrellas and shorts, a storm is coming!
TVC:GB10YShort
by Dorado_Crypto
SG10Y Govt Bond and SPY relationship Part VConditions appear to be shifting really quickly... just a few days ago, it appeared that the SG10Y Govt Bond was going to break a low and go further down, sending the correlated S&P500 (and other indexes rallying up. BUT, it brooke down and recovered very quickly. NOW, it appears to be ready to break UP and out of the downtrend line. This has happened before, including the indication of the MACD (shown here this time), where there is also a bullish divergence and just now, a crossover of the MACD on the Signal line. Therefore, expecting a repeat of early Feb 2023, and IF this is the case, then the corresponding SPY action would be a lower high and a breakdown (red dotted arrow projects the SPY (blue line). Watch the next 5 trading days... critical clues will be revealed. Btw, if this scenario is played out, then the USD should concomitantly be bearish, Gold bullish, Crude bearish for the most part, etc. Also... for those who are like keen to get the SG bonds, the yields should be rising, not dropping, so no need to rush. Have a good idea of what might happen (don't listen wholesale to those who want to get you to buy stuff), then make a plan to have that idea happen. So far, five parts to this story, and so far it is holding the correlation as expected.
TVC:SG10Y
by Auguraltrader
Correlation Analysis of US G 10 Yr Bonds Vs BitcoinThis intermarket analysis really helps to understand how money is flowing. I use it consistently throughout my entire process. Here we’re comparing the charts of US Government 10 Year Bonds (Blue line) and Bitcoin (orange line). As you can see, the two move different directions, you can see the US G 10 Yr Bonds broke and retested the rising MYL trendline also Bitcoin broke and retested the MYL descending trendline and if rates are falling. So the ratio between the two is a good indication of where the market thinks rates are going.
TVC:US10YLong
by AJCRYPTO25
US 10Y TREASURY: a “dead cross”A $31.4 trillion debt ceiling was in the spotlight of the markets during the previous week. The possibility of the US debt default would certainly have large repercussions not only to the US but also would be felt through the rest of the world. As per currently available official data, the estimation is that the US might default on its debt in June or July, the latest, which is labeled by the government as “significant risk”. As for the Fed rate hikes, the majority of investors are of the opinion that the Fed should stop with further rate increases, as it might hurt the economy more than previously estimated. The US 10Y T-notes ended the week at level of 3.463% as investors were digesting the potential outlook of the US economy after recent developments and rate hikes. The University of Michigan report has been released during the previous week, providing expectations on inflation for the next 5 years. The majority of participants in the survey answered 3.2%, which is higher from the 3.0% estimated during the previous month. Current sentiment on US10Y T-notes is neutral, as RSI moves around level of 50. The moving average of 50 days just made a cross with its MA200 counterpart from the upside, forming a so-called “dead cross”. In technical analysis this indicates the high potential for a downside in the future period. However, for the week ahead, charts are pointing to some potential for the 10Y T-notes to reach 3.30%, but would most certainly oscillate around $3.40 during the week.
TVC:US10Y
by XBTFX
US10Y - Watch out for speculative short coveringKey Takeaways: - Large speculators are the most short they have been since 2018 (around -730k contracts) - In 2018 they started to short cover (or buy back their short position) and US10-Year Treasury Yield started to drop. - This could happen again so need to watch out. Data: US10Y : US10-Year Treasury Yield COT:043602_F_NCP_L-COT:043602_F_NCP_S : US10-Year Treasury Note Net Futures Positioning by Large Speculators. From CME's Commitment of Traders Report. Calculated by taking total long position minus total short position.
TVC:US10YShort
by joshdawe21
Navigating The American Debt Ceiling DramaSome people create their own storms. And then get upset when it starts to rain. US Debt Ceiling drama is akin to a soap opera that never ends. Debt ceiling issue is not new. Why bother now? Political polarisation in the US has got to unprecedented levels. The showmanship could tip over into a political nightmare. It could send economic shockwaves with impact deeply felt both within US and well beyond its shores. Many politicians seemingly are so pulled away from reality that their fantasies aren’t working. Wishing away a problem out of its existence is not a solution. The Debt Ceiling is here. US defaulting on its debt is highly unlikely. Scarily though, the probability of that occurrence is non-zero. This paper looks at recent financial history surrounding prior debt ceiling episodes. Crucially, it delves into investor behaviour and their corresponding investment decisions across various asset classes. When uncertainty looms large, straddles and spreads arguably deliver optimal hedging and investment outcomes. A SHORT HISTORY OF DEBT CEILING. WHAT IS IT? HAS IT BEEN BREACHED BEFORE? The US debt ceiling is a maximum cap set by the Congress on the debt level that can be issued by the US Treasury to fund US Government spending. The ceiling was first introduced in 1917 to give US Treasury more flexibility to borrow money to fund first world war. When the US government spends more money than it brings in through taxes and revenues, the US Treasury issues bonds to make up the deficit. The net treasury bond issuance is the US national debt. Last year, the US Government spent USD 6.27 trillion while only collecting USD 4.9 trillion in revenue. This resulted in a deficit of “only” USD 1.38 trillion which had to be financed through US treasury bond issuance. This deficit was not an exception. In fact, that’s the norm. The US Government can afford to and has been a profligate borrower. It has run a deficit each year since 2001. In fact, it has had budget surplus ONLY five (5) times in the last fifty (50) years. If that wasn’t enough, the deficit ballooned drastically from under USD 1 trillion in 2019 to more than USD 3.1 trillion in 2020 and USD 2.7 trillion in 2021 thanks to massive pandemic stimulus programs and tax deferrals. This pushed the total US national debt to a staggering USD 31.46 trillion, higher than the debt ceiling of USD 31.4 trillion. The limit was breached! So, what happened when the ceiling was broken? Not that much actually. When the ceiling is broken into, the US Congress must pass legislation to raise or suspend the ceiling. Congress has raised the ceiling not once but 78 times since 1970. The decision is usually cross-partisan as the ceiling has been raised under both Republicans and Democrats. It was last raised in 2021 by USD 2.5 trillion to its current level. Where consensus over raising the ceiling cannot be reached, Congress can also choose to suspend the ceiling as a temporary measure. This was last done from 2019 to 2021. Since January, the Treasury has had to rely on the Treasury General Account and extraordinary measures to keep the country functioning. Cash balance at the Treasury remains precariously low. Its operating balance stood close to nearly USD 1 trillion last April but now hovers around USD 200 billion. Such reckless borrowing! Yet US continues to remain profligate. How? Global investors have confidence in the US Government's ability to service its debt. Despite the increasing debt, the US Government continues to pay investors interest on its bonds without a miss. Strong economic growth and its role as a global economic powerhouse assuages investor concerns over a potential default. Additionally, where Treasury does not have adequate operating cash flow, it leans on a credit line from the Federal Reserve (“Fed”). The dollar’s strength and reserve status contribute to the US Government’s creditworthiness and vice-versa. The Fed is also the largest holder of US government debt. It holds USD 6.1 trillion as of September 2022 (20% of the overall debt). The share of government debt held by the Fed surged to current levels from just above 10% during the pandemic due to massive purchases of treasury bills by the Fed as an emergency stimulus measure. GROWING US DEBT IS BECOMING A SOURCE OF CONCERN US debt has ballooned during the pandemic. It is deeply concerning for multiple reasons. Key among them is the risk of default. Although debt has increased significantly, GDP growth during this period has been tepid due to pandemic restrictions stifling economic activity. As such the ratio of national debt to GDP, a measure of the US’s ability to pay back its loan has also skyrocketed. This increases the risk that the US Government may fail to service its debt. A US Government default would lead to surging yields on treasury bonds and crashing stock prices. It would also call into question its creditworthiness limiting future borrowing potential. A default will also have far-reaching economic consequences threatening dollar hegemony which is already being challenged on multiple fronts. Another concern is the rising cost of servicing the debt. Servicing the debt is the single largest government expense. Interest payments on debt this year are expected to reach USD 357.1 billion or 6.8% of all government expenditure. Additionally, with the Fed having raised interest rates with no stated intention of pivoting in 2023, the interest rate on US public debt, which is currently at historical lows, will also rise. DEBT CEILING BREACH AGAIN. SO WHAT? LOOKING BACK IN TIME FOR ANSWERS. There has been more than one occasion when political disagreements resulted in Congress delaying the raising of the debt limit. In 2011, political disagreements pushed the government to the brink of default. The ceiling was raised just two (2) days before the estimated default deadline (the “X-date”). Despite the raise, S&P lowered its credit rating for the United States from AAA to AA+ reflecting the effects that political disagreements were having on the country’s creditworthiness. This played out again in 2013 due to same political disagreements. Thankfully, for investors, the effects of the 2013 crisis on financial markets were not as severe. Flash back. Equity markets initially dropped after the debt ceiling was reached and investors worried that the disagreements would not be resolved in time. In July 2011, markets started to recover as both parties started to work on deficit reduction proposals. Then on July 25th, just eight (8) days before the borrowing authority of the US would be exhausted, Credit Default Swaps on US debt spiked and the CDS curve inverted as participants feared that a deal would not be reached in time. This led equities sharply lower. On August 2nd, a bill raising the ceiling was rushed through both the House and the Senate. Following this S&P lowered US credit rating from AAA to AA+ citing uncontrolled debt growth. Equity prices continued to drop even after the passage of the bill. Commodities showed similar price behaviour heading into the passage of the bill. However, unlike stocks, gold and silver prices rallied after August 2nd. The USD weakened against other currencies before the passing of the bill but recovered after August 2nd. Treasury yields trended lower but spiked during key events during this period. Short-term treasury yields remained highly volatile. Following crisis resolution, yields plunged sharply. US DEBT CEILING CRISIS AGAIN. WHAT NOW IN 2023? The US reached its debt ceiling again in January 2023 and yet another debt crisis. 2013 is repeating itself again as lawmakers disagree over whether to raise the ceiling further or bring the budget under control. The Congressional Budget Office (CBO), a non-partisan organization, has estimated that the US could be at a risk of default as early as June 1st. Republicans disagree with the Biden administration. They seek budget cuts to reduce annual deficits while Democrats want the ceiling to be raised without any conditions tied to it. This crisis is exacerbated by rising political polarisation in the US. Not just metamorphically, the Republicans and Democrats are at each other’s throat. A study by the Carnegie Endowment for International Peace found that no established democracy in the recent past has been as polarised as the US is today. This raises the risk that Congress gets into a stalemate. Moreover, the house is only in session for 12 days in May. After the law is passed in Congress it must also pass through the Senate and the President. The availability of all three overlap on just seven (7) days, the last of which is the 17th of May. This means that lawmakers have just 3 days (from May 12th) to reconcile their differences before the US is put at risk of default. POSITIONING INVESTMENT PORTFOLIOS IN DEBT CRISIS WITH X-DATE IN SIGHT What’s X-date? It refers to the date on which the US Government would have exhausted all its options except debt default. The X-date could arrive as early as June 1st. There is a small chance that it could arrive in late July or early August. The US Government collects tax receipts in mid-June. If the US Treasury can stretch until then it will have enough cash to last another six weeks before knocking against the debt ceiling again. The current crisis has been brewing. Equity markets remain sanguine. But near-term treasury yields have started panicking. Short term yields have spiked. The difference in yield on Treasury Bills that mature before the likely X-date (23/May) & after it (13/June) has shot up. Muted equity markets create compelling opportunity for short sellers. In the same vein, it also presents buying opportunities when debt ceiling is eventually lifted. When up or down is near impossible to predict, an astutely crafted straddle or time spread can save the day. DISCLAIMER This case study is for educational purposes only and does not constitute investment recommendations or advice. Nor are they used to promote any specific products, or services. Trading or investment ideas cited here are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management or trading under the market scenarios being discussed. Please read the FULL DISCLAIMER the link to which is provided in our profile description.
Editors' picks
TVC:US01MY
by mintdotfinance
27
NO MORE MONEY?Rates on short-dated bills have soared ahead of the so-called ‘X-date’ early next month, after Treasury Secretary Janet Yellen warned last week that the government could run out of cash as soon as June 1. It's worth noting that the debt ceiling issue has arisen multiple times over the years, and each time it has ultimately been resolved. While it's impossible to predict the outcome of the current situation, historical precedent suggests that it is likely to be resolved eventually. For investors with a high risk tolerance, buying short-term T-bills now could be a smart move that provides a higher rate of return than longer-term Treasury bonds. One notable example of a similar situation occurred in 2011, when the US government faced a potential default due to a political standoff over raising the debt ceiling. The prospect of a default caused investors to fear that the government would not be able to meet its financial obligations, leading to a rise in short-term interest rates. In the weeks leading up to the deadline, yields on one-month T-bills increased from around 0.02% to over 0.25%, while yields on three-month and six-month T-bills also rose significantly. However, once the debt ceiling was eventually raised, the yields on these short-term Treasuries returned to more typical levels. Investors who had bought short-term Treasuries during this period would have seen a significant increase in yield, providing a lucrative opportunity. Similarly, the current debt ceiling issue could present a similar opportunity for investors who are willing to take on the associated risk.
TVC:US10Y
by optionsswing