CNBCAnyone remember 2 years ago when yield curve inversions were happening and they moved the goal post for recession? Naw, nothing to see here! Jim Cramer just like 6 months ago said that anyone that uses the yield curve as a tool is spreading FOMO and FUD, blah, blah, blah. I still cannot believe after the Wells Fargo garbage anyone would ever listen to Cramer but they still do. It just shows who in the market is delusional. Just focus on earnings he said. Now that Trump is in office the main stream media has done a complete 180 degrees. On CNBC yesterday: The federal Reserve's favorite recession indicator is now flashing warning signs. Nobody in mainstream media was saying anything about recession's on the Biden administration clock but now that Trump is in office the yield curve and inversions matter? This just did not happen overnight, not even remotely. You can look up numerous charts that show spending by President and Biden was the absolute worst, ever. If you listen to facts, you cannot fail as a trader but if you play follow the leader, you absolutely will get your rear end handed to you. Follow charts, not feelings, not the news, especially CNBC. Here is a news flash, recession: You wish, The Great Depression 2.0 with WW3 is next. You cannot print into oblivion and think nobody is going to pay for this. The US dollar isn't even worth 3 cents. People think inflation is the cost of products going up. It is not, inflation is the dollar worth less and that is why the dollar does not get stretched as far. Companies just take advantage of inflation to jack prices and line their pockets. It really is that simple. Back during the Great Depression, JP Morgan bailed the market out. Fun Facts:
-J.P. Morgan was a banker who helped the U.S. government during the Panic of 1893 and the Panic of 1907.
-During the Panic of 1893, Morgan helped the U.S. government by purchasing $62 million in gold to replenish the government's gold reserves.
-During the Panic of 1907, Morgan and his banker friends purchased $30 million in city bonds to prevent a financial collapse.
-Morgan also helped to finance the merger of Edison General Electric and Thomson-Houston Electric Company to form General Electric in 1891. A total of less than $100 million.
You are not bailing out a market that is over $30 Trillion in debt, so what happens? You want to know the truth? We don't do anything, default on the debt, the dollar crashes (which it already has) and we move to a new system. Which is CBDC, or Central Bank Digital Currency. Why do you think Trump is so big on crypto? Because he knows what is next, he is a business man. No matter what you think about presidents as people, they are all in on this and you're not invited. This is why I swing trade because until this hits bottom and I am talking S&P 500 to 1100 type of bottom, there's nothing long that looks great at all. We have to crash first. So many falsehoods out there being propagated by main stream media and wanna be traders, instead of just saying the truth. In the markets, it doesn't matter which side you're on, money doesn't care who you vote for. Stick to the charts and you cannot lose in short term trades. It isn't about the quantity of trades and your 40 accounts. It's about the quality, in and out. We have to stop lying in the financial world because of political sides. Politics does not belong on Wall Street. In the late 90's, I never even heard anyone talk about Democrats or Republicans on the trading floor. My point of all this? Do you see how following narratives can get you into trouble? 401ks, pensions, retirements are going to implode when the debt market finally gives way. Get ready folks!!
Government bonds
US10Y - End of February Analysis- February bearish monthly bias has been achieved this month!
- Sellside liquidity rests below 4.126%
- The possibility still exists for a short-term bullish retracement filling part of the imbalance this months candle created.
- Looking out for a retracement then capitulation through Sellside liquidity @ 4.126%
- Fair value gap lays close @ 3.932% – 4.170% so I will be paying close attention to it.
US 10-year yields eyeing move towards 4.00%Previous string of ideas has been invalidated following last week's price action.
The US 10-year yield completely crashed through the support at 4.40% last week following a host of strong data prints from the US coupled with a wave of risk-off investor sentiment stoked by Trump’s tariff fears which had investors rushing to the safety of US treasuries. Could Trump’s hardline tariff stance perhaps be a way to create demand for US debt?
Technically the yields have now dropped into oversold territory which strengthens the support between 4.13% and 4.17% however continued volatility in the equity markets will allow the US treasury market to attract more interest which could allow for a deeper move towards the 38.2% Fibo retracement at 4.04%.
The headlining events for this week is the ECB interest rate meeting and the NFPs for February. Market expectations are for the ECB to cut rates from 2.9% to 2.65%. The ECB has held a more dovish stance than the Fed since the rate cutting cycle began and if it’s more of the same on Thursday, I expect the US 10-year yield to find more demand to hold onto levels below the critical 200-day MA at 2.43%. Most of the focus will however be on the US non-farm payroll print for February. The NFPs print for January came in slightly lower than expected and another weak print on Friday will have investors question the validity of Powell’s statement that the US economy is strong and that the Fed is in no rush to cut interest rates. A weak NFP print will thus be positive for the US treasury bulls.
US 10Y TREASURY: uncertainty demands T-bonds Geopolitics were once again in the spotlight of market sentiment during the previous week. The uncertainty over the potential future increased tensions within the geopolitical sphere, pushed the US Treasury yields further to the lower grounds. Increased demand started with uncertainty over trade tariffs and currently is affected by politics. The funds from US equity markets fled toward the US Treasury bonds. The 10Y US benchmark yields started the week around 4,45% and ended it at 4,20%.
Looking at charts, the major support line for 10Y US yields lies around the level of 4,15%. In this sense, there is space for yields to move further toward the downside. Whether this would be the case for the week ahead is uncertain. There is also probability for yields to revert a bit toward the higher grounds, but some significant move should not be expected in the week ahead. Potential level could be the 4,3%.
USD outlook: The DJT wrecking ball+1 is gaining momentumHello traders
First of all, best of luck for yet another challenging week ahead.
I usually keep my charts simple in appearance but in this case I toyed around with the canvas to illustrate the direction of these three USD instruments. It also gave me the opportunity to simmer down before I start writing my next Idea on EUR/USD.
The charts tell the story. The FOMC's 50 bps rate cut on September 18th 2024 caused considerable consternation in the markets. It was a turning point for all three USD instruments because it was an implicit acknowledgement that the FOMC saw some economic hardship ahead. The DXY was the outlier because it zoomed higher because of the FOMC projections for future rate cuts but more importantly because it was still the highest rate in the G7 other than the UK.
The USD 10Y T-bill and USD 10Y yield tell a different story. The decrease and breakdown in the yield shows less confidence in the economy moving forward.
* Investopedia.com has good information about the inverse relationship between the the cost of a bond and the yield, for anyone who wants to brush up on that topic.
In my opinion, DJT+1 and his/their tariff threats and chaotic administration decisions(think firing Federal employees safeguarding our nuclear arsenal, a threat to abolish the Dept. of Education etc. etc. etc.) are reflected in these charts. He is getting his wish by slightly devaluing the USD but ultimately his economic policies are going to lead to more economic pain for American consumers by increasing inflation. Canada and Mexico, our biggest trade partners have made it clear, they will retaliate with equal sized tariffs. Load up on the guacamole while you can. :)) I do not foresee the FOMC raising rates but they will also not be cutting either if and when inflation raises it's ugly head again.
We all know DJT's casual relationship with facts and his penchant to brag about his exceptional "Common Sense" that also explained the tragic death of 67 individuals in the recent Washington D.C. plane crash. Please form your own opinions on him also blaming it on DEI initiatives. I am staying out of that minefield and also do not have enough time or space to deal with any broken individual's misogyny and racial hatred. Bottom line, the USA does not have a leader who can instill confidence in our future or the International order and marketplace. He is aided by his +1, Musk, who somehow believe that the Silicon Valley mantra of "move fast and break things" will work in Government and in the international arena.
I do no think so. These two bulls in the china shop will turn around sooner than later and deny that they are responsible for the International and Domestic wreckage, chaos and damage that they have caused.
Only time will tell, though. I put my money on the mid terms. And once again, I am a registered Independent voter in this beautiful land of the USA, which despite all the problems and issues, is still one of the best places in the world to live.
Thanks for reading and feel free to share your opinion either way.
US 10Y TREASURY: safe-haven for uncertain growthThe US 10Y Treasury yield fell sharply during the previous week, in line with a drop on US equity markets. At the same time, the price of gold headed toward a new all time highest level, marking its sixth consecutive gaining week. Uncertainty is a word which has dominated financial markets since the establishment of the new US Administration. Spooky words like tariffs, inflation, and questionable economic growth are currently dominating investors' sentiment, in which sense, some further funds reallocations are quite possible in the coming period. After new stories regarding tariffs, and Michigan Consumer Sentiment, which showed the highest inflation expectations for the period of next five years, investors were seeking safe-haven assets, like Treasury bonds and gold, in order to sustain the value of their money.
The 10Y Treasury yields dropped during the week from the level of 4,56% down to 4,43%, where they are closing the week. For the week ahead, there is a possibility for a short term reversal to the upside, however, Friday brings new US PCE data, which is Fed's favourite inflation gauge. Depending on the data, some higher volatility is possible again.
U.S. FIRMS SWAP DOLLARS FOR EURO to lower funding costsU.S. FIRMS SWAP DOLLARS FOR EURO to lower funding costs—SMART MOVE?
(1/9)
Good afternoon, Tradingview! U.S. companies are flipping dollar debt into euros—slashing borrowing costs 📈🔥. Cross-currency swaps are the hot ticket amid rate gaps. Let’s break it down! 🚀
(2/9) – SWAP SURGE
• Trend: Dollar bonds morph into euros 💥
• Why: Eurozone rates lag U.S. by ~200 points 📊
• Volume: $266B in Jan ‘25 swaps, up 7% YoY
Lower rates, big savings—companies pounce!
(3/9) – THE TRIGGER
• Fed: Holds steady—U.S. rates stay high 🌍
• ECB: Eases up—eurozone softens 🚗
• Trump Tariffs: Stir inflation fears—volatility spikes 🌟
Dollar strength pushes firms to euro deals!
(4/9) – HOW IT WORKS
• Swap: Trade dollar debt for euro payments 📈
• Gain: Cheaper interest, currency hedge
• Impact: Millions saved, euro cash flows shine
It’s a financial jujitsu move—clever stuff! 🌍
(5/9) – RISKS IN PLAY
• Euro Flip: Stronger euro could zap savings ⚠️
• FX Losses: Hedging costs climb if dollar dips 🏛️
• Uncertainty: Fed vs. ECB—rate dance wobbles 📉
Smart bet, but not risk-free!
(6/9) – WHY NOW?
• Rate Gap: U.S. high, eurozone low—carry’s juicy 🌟
• Trump Effect: Tariffs fuel dollar power 🔍
• Global Ops: U.S. firms shield Europe earnings 🚦
Timing’s ripe—swaps are the shield!
(7/9) – MARKET VIBE
• Early ‘25: Swap restructures cash in 🌍
• Savings: redirected to debt, flexibility 📈
• Trend Watch: Grows if rate split holds
Companies adapt—financial acrobatics in action!
(8/9) – Dollar-to-euro swaps—what’s your take?
1️⃣ Bullish—Cost cuts win big.
2️⃣ Neutral—Works now, risks later.
3️⃣ Bearish—Euro rebound kills it.
Vote below! 🗳️👇
(9/9) – FINAL TAKEAWAY
U.S. firms swap dollars for euros—saving millions as rates diverge 🌍🪙. Tariffs and Fed fuel the play, but euro risks lurk. Genius or gamble?