US03MY trade ideas
Another 25 bps cut in interest ratesAnother 25 bps cut in interest rates This analysis predicts a FED 50 bounce cut. The chart shows the yield curve of the two-year US government bond and its future path. The current analysis attempts to predict the next three months' interest forecast. Let's look at the chart. It can be seen that in the shorter term, the market once again ran ahead. It can be seen that the intervention was a hurry for the Fed to announce a further cut in interest rates at the open market committee meeting on March 18. In my opinion, this can happen if the market prices future rates in the 0.5% range within a few days. In the event that the futures interest rates continue to fall as a "falling knife", it can be stated with certainty that, in addition to interest rate cuts, additional asset purchase incentives may be announced.
The market will drop even moreThis chart shows the relationship between the 03 M Y on American treasury bonds and S&P 500. It shows a clear relationship during the last two crises and also shows that the downturn has just started.
US03M chart before another plunge.US03M chart before another plunge. The chart shows the forward rate curve for US 3-month government bonds. I've analyzed this curve many times. It can be seen that the chart makes small movements. Furthermore, it can be seen that the anti-movement ATRs (white rectangle) have a strong pressure on the exchange rate. In the event that the exchange rate falls out of this narrow-band siding, another sharp drop would occur. What it means. That the three-month forward dollar rates are coming under pressure again. The market expects another interest rate cut. This could lead to a weakening of the dollar. I note that forward rates on 2-year and 10-year government bonds are already falling. They are around 1.3%. Which tells me that maybe not in the short term, in the next 2-3 years the market can expect another dollar cut in interest rates.
The market expects another cut of 25 basis points... The market is expecting another interest rate cut. Construction of the declining double fractal at US03M may begin. This means that the short-term interest rate forecast may fall to 1.25%. These forecasts have been relatively stable so far. It can be seen that the peaks of the exchange rate wave sequence follow the auxiliary axis projected to the moving average curve. As a result, I expect another dollar to weaken.
3 additional interest rate cuts... This chart has recently projected the rate of interest rate cuts very precisely. In case the chart analysis is correct, it predicts an additional 3x FED interest rate cut. This may be a rising factor for the euro. Therefore, I expect the current appreciation of the euro to be the start of a longer process.
3 month yield vs recession?A clear pattern is showing -- at least for the two previous recessions -- when looking at the 3-month yield on monthly chart. The long stochastic has given strong indication twice before and is signaling imminent recession again. We'll see how it plays out, but I am more convinced than ever recession is very near and may have already begun.
US03MY 3 month YieldThe market has been tanking since the last Fed meeting, now Powell is hinting at another rate cut in Oct. The rate cut is already priced in now, and they're starting to price in another one for Dec or Jan.
I'm beginning to think that Trump wants rate cuts more than he wants a China trade deal since his businesses are all interest rate sensitive, and he's leveraging China tariffs to get what he wants.... zero interest rates.
So I'm thinking maybe a rally on rate cut talks (Powell speaks a couple more time next week), tank on China deal fail, pump towards Fed meeting for the actual rate cut, tank on the Dot Plot, etc... In other words, some major whipsaw at the top of the market, as one would expect at ATH before a recession.
If China does actually sign a deal, expect super pumptardedness to ATH. Either way, I don't think the market tanks until next year when libtards elect a commie as president.
US03MY3 month yield is still below Fed rate which means the market is still anticipating a rate cut. It would be absolutely ridiculous for the Fed to cut rates when the economy is still growing. Retail sales were good, unemployment numbers are still at the bottom.
If the Fed doesn't cut rate or signal one for Oct, expect the market to tank.
Sept Fed MeetingI really so no reason for the Fed to cut rates in Sept, considering that the China meeting doesn't happen until Oct and the market is at the top. Wage inflation is starting to creep up as well which will eventually lead to real inflation.
Rate cut is already priced in so look for the market to react negatively if they don't get what they've already priced in. It also depends on what the dot plot shows for Oct and what Powell says.
Bond yield inversion as 3 month yield greater than 10 year:Sign of recession
Bond yield inversion as 3 month yield greater than 10 year:
3 Month YieldHere's the issue, the market already has more than one rate cut priced in as shown, if the Feds don't signal an additional cut next week, we're going to see an adjustment.... market will drop.
3 Month Treasury Yield Is Projecting The Next Easing Cycle.The US Government Bond 3 Month Yield Is falling ahead of any official rate cut by Jerome Powell and the Federal Reserve Board. This effectively tells us the market is pricing in a rate cut being announced at the next Federal Open Market Committee meeting on July 30 2019.
This is more significant than most traders realise. It has become common place on Wall Street to celebrate rate cuts over the last decade since the financial crisis, after all easy money policy means more cash flowing into the stock market, and this is generally the case except if it comes directly after a tightening cycle in the face of a recession. But, I hear you say, how can the tightening cycle be over and a new recession beginning if we have only managed to reach a diminutive 2.25% Fed Funds Rate? Well the answer is simple, the interest rate is not what matters, what matters is the economies ability to service that debt load, and right now 2.25% is all the American economy can withstand.
This chart depicts the interest rate and shows where our ability to service that debt lies helping us to understand where the tightening cycle ends and the easing cycle begins. Once you understand this it becomes clear that the economic recovery, lackluster expansion, and good times have all come to an apex and the tide is now turning as the American economy struggles with its debt load at these interest rate levels.
As the American economy continues to weaken falsely masked by low unemployment levels (labor force participation rate is at all time lows) and corporate debt starts showing signs of cracking we will experience an easing cycle in which the Fed will take rates below the zero lower bound into negative territory in order to stimulate the economy with, you guessed it, even more debt.
The next recession is potentially right around the corner.
errrm. free monies anyone? 3 month 2.12- vs 10 year 1.99. fill the gap. short 10-year, long 3-month. the inversion is likely to correct over time. but insanity that the 3 month yield is more than the 10 year
Powell scared of the fallout of 2019-2020 economic crashThe fed has been holding out on rate hikes and has kept the status quo ever since the return of volatility back in October 2018.
The FED has kept citing the economy as strong, yet they kept interest rates flat instead of raising them. They are now going to decrease rates with a maxed out balanced sheet showing they have no confidence in the current strength of the economy (built purely based on credit and debt) and that the market is so inflated due to the enormous amount of debt that it cannot even sustain a rate of 2.5%.
With all other factors taken into account, if the market is faltering at 2.5%, and continuing to show signs of weakness, The FED has no other choice but to do so and with its balance sheet loaded to the brim, the subsequent shitstorm that this will unleash will be of epic proportion.
I expect interest rates to crater following the stock market. Could be at any time within the next 6-8 months most likely, depending on how fast the economy softens and how rapidly the global economic situation deteriorates.
ratesshould cross into the rubicon by fall, gold should be done its' final flush by then, sell in May and go Away again
The 3 Month Effective Yield - US Treasuries (Continued Stage 2) Powerful continuation on the rise of effective yields in short dated US T-Bills. This rise looks unlikely to pause any time soon.
As bond prices fall, and they trade below the face repayment value, thus increasing their effective yield. They effectively yield more because they can be purchased for less than what will be repaid at the end of the bond's term.
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Let's go to 10% so everyone closes their "investments" and crash the market.
Down down down
#2019XXIthCenturyRecession
The economy is too slow changing thought, I want to laugh now and say I was right now don't want to wait years :(
Ripple TRON etc are nothing!
Even 5% would make every one calm down and stop borrowing truck loads to buy dreaming they are the next Warren Buffet.
But actually wtf near flat interest rates, what do banks charge? This is broken, borrow 1 billion buy whatever bond take 3% let's say, pay back 1 billion + 1% keep the 2% (20 million).
