Is the Worst OVER? This is the differential of 10yr vs 1yr US bond which represents long term against short term yield on sovereign debt, and those you don't know, short term bonds are used by central banks to control interest rates(amazing uh? the FED does not actually print money) therefore they do use bonds as a tool to control interest rates which then controls the S&D of capital.
As you can see, we are back at a differential which is extremely low, back to energy crisis levels. However, we seem to be already at very low levels, does that mean THE WORST HAS COME? What is going to happen to the stock market?
A very quick and personal thought to sum everything up as I do not consider myself an expert macroeconomist: the market is efficient, meaning that the current price on every single security is traded at all the current public information that is available and if something keeps going up, it means that expectation are in favor of it moving higher.
Hope that explains what I wanted to say,
Feel free to ask question, be safe!
US10Y trade ideas
US 10Y yield chart - key levels to watch ahead of dataWe have a big week of data
US inflation figures are released tomorrow and are likely to show a continued disinflationary trend, with the headline rate falling to 4.1%. This will help the Fed remain on pause for the Wednesday rate decision.
The major level to watch to our mind is the tentative downtrend drawn from the October 2022 high. This comes in at 3.88. The market has been sidelined for months but is building a potential bullish consolidation pattern and that idea will be reinforced should a close above the 3.88 downtrend be seen.
US 10Y TREASURY: waiting FOMC meeting As the FOMC meeting is approaching and more data on inflation pressures and the economy are released, the Treasury bond market is increasing its volatility. Current question which is in the spotlight is whether the Fed will hike rates by 25 bps or it will skip June and leave rate increase for July`s meeting. Current market consensus is that rates will remain at the same level during June. Although 10Y Treasuries started the week around 3.6%, the yield was soon increased to the level of 3.8%. It was sort of testing this level for one more time, if it can hold. Still, yields are ending the week around 3.7%.
The week ahead might bring some volatility back to the markets, in case the Fed still increases rates, contrary market expectations. Certainly, inflation figures will be posted a day before the FOMC meeting, and any surprises on this side might also bring some volatility back. As per current charts, since 3.8% was tested, the market could easily slip back to the level of 3.6%, which might occur during the week ahead. At this moment, there is no indication that 3.8% might be breached to the upside. However, it should be noted, that a potential breach of 3.8% level to the upside, would certainly lead the market to the level of 4% yield for 10Y Treasuries.
Us Government Bonds 10 yr yield Looking for a bullish continuation to the upside long term. What Does the 10-Year Treasury Yield Mean? The 10-year Treasury yield is the yield that the government pays investors that purchase the specific security. Purchase of the 10-year note is essentially a loan made to the U.S. government.
US10Y: Prepare for a long term sell.The US10Y continues to trade inside the long term Channel Down since the October 21st High and has now formed the same peak formation as then. With the 1D time frame neutral (RSI = 45.126, MACD = 58.593, MACD = -0.280), the conditions have emerged for a new long term sell. If the previous -20% decline is repeated, then target the bottom of the Channel Down on a TP = 3.100.
Prior idea:
## If you like our free content follow our profile to get more daily ideas. ##
## Comments and likes are greatly appreciated. ##
INTERMARKET ANALYSIS, DOLLAR TO RALLYThe TVC:DXY follows the Interest rates and also inversely correlated to the Bond Yields. Check Out my previous analysis on CBOT:ZB1!
I anticipate the the huge volume gap to be filled and from it's present Price levels. Therefore I am Bullish on Both Interest rates and Dollar, I expect dollar to reach Price levels of 106-108
US 10Y TREASURY: anticipating 25 bps hikeDebt-ceiling saga is finally over, which means that the US will not enter into technical default, which is something that the majority of market participants anticipated. It had some minor impact on the US 10Y yields. However, old topics are currently preoccupying the market, which is the question whether the Fed will increase interest rates at June`s FOMC meeting or it might be at July`s meeting. Anyway, anticipation of a further 25 bps hike is high, so the market reacted in line with its sentiment during the previous week.
The 10Y Treasury yields started the previous week below 3.8%. It was quite evident on the charts that 3.8% was a peaking level at this round. Lowest weekly level was 3.57% on Thursday, however, Friday`s better than expected jobs figures pushed yields back to the level of 3.7%. This comes in line with anticipations of another 25 bps hike in June/Julys FOMC sessions.
As per current charts, there is some probability that markets would push yields back to the 3.8% level, however, there is no indication, neither in fundamentals, that the yields might go higher from this level. On the opposite side, there is a lower probability that 3.5% might be tested again. However, it should be noted for the future period, that potential further rate hikes by the Fed, above currently expected 25 bps, might drive 10Y yields toward the 4%.
US 10Y TREASURY: peaking at 3.8%? During the previous week the US Treasury yields were under influence of both debt-ceiling ongoing negotiations without an actual deal, and posted PCE data. As officially released data on PCE shows higher than expected monthly output of 0.4%, it heated expectations of market participants that the Fed will most probably continue with further rate increases of 25 bps in June`s meeting. Reaction of the market was an increase of Treasury yields, where 10Y bond yields increased from 3.6% up to 3.8%.
Insecurity is still high on the market, so it might be expected that bond yields will stay elevated during the following period of time. At this moment, there is no indication on charts that yields might go higher, reaching 4%, so at this moment there is a sort of peak at level of 3.8%. Still, if the Fed continues to increase interest rates, a 4% might easily become a target of 10Y bonds. For the week ahead the most important to watch is potential debt-negotiation deal, as the US might enter into default as soon as June 5th, as per Treasury Secretary Yellen. Hopefully, this will not be the end scenario. If deal is accomplished, the yields might revert a bit to the downside, probably to the level of 3.6%.
US10Y Approaching the top of the Channel Down. Sell opportunity.The U.S. Government Bonds 10YR Yield (US10Y) is approaching the top of the (blue) Channel Down pattern, which was our bullish target on our last trade ten days ago (see chart below):
Despite not having hit it yet, we decide to close this long trade as we see more value in starting a sell-near-highs approach now. There is also a diverging Channel Down (dotted lines) involved and the maximum technical top that the price can make without breaking any pattern is the top of the Rectangle (4.090% Resistance). That will be our 2nd and final sell entry.
Pay attention to the 1D RSI also, which is approaching the overbought barrier (70.00) just like on February 21. Our bearish strategy targets the May 04 Low at 3.300%.
-------------------------------------------------------------------------------
** Please LIKE ๐, FOLLOW โ
, SHARE ๐ and COMMENT โ if you enjoy this idea! Also share your ideas and charts in the comments section below! **
-------------------------------------------------------------------------------
๐ธ๐ธ๐ธ๐ธ๐ธ๐ธ
๐ ๐ ๐ ๐ ๐ ๐
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.
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!
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 ๐, FOLLOW โ
, SHARE ๐ and COMMENT โ if you enjoy this idea! Also share your ideas and charts in the comments section below! **
-------------------------------------------------------------------------------
๐ธ๐ธ๐ธ๐ธ๐ธ๐ธ
๐ ๐ ๐ ๐ ๐ ๐
Correlation Analysis of US G 10 Yr Bonds Vs BitcoinThe 2nd way that I use an additional window is for correlation analysis. When certain assets move one direction with other moves opposite direction. Both US 10 yr bonds and Bitcoin formed reversal chart patterns. US G 10 Year Bonds formed Rising Wedge and Bitcoin formed Falling Wedge on weekly Time Frame. Both assets broke and retested nicely on their respectively chart pattern.
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 weโre 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.