US10Y trade ideas
Will bond spike again ?Bond yield looks to have bottomed out at 1.12. Daily close abv 1.38 will start bullish HHHL structure. In such scenario , price may adance to 2.02 (minimum) on conservative slope and 2.34 - 2.60 on steep slope.
Minimum deadline as of now is 22nd Jan but if it attempts for 2.60 then deadline could extend to May 2022.
Yield spreads favor EUR longsThe spread between the 10-year US and German government bond yields has dropped below a macro bullish trendline, characterizing the widening since 2008.
In other words, the market says the era of US rates being higher than German rates is passe! And therefore, holding EUR shorts is risky.
US10Y - Looks like a high is completedUS10Y could be in at its peak in current wave cycle to stary a ABC correction.
RSI on daily is also showing divergence indicating topping out sign. The correction in US10 will be good for equities.
View will be invalid if the high 4.123 is broken and wave 5 might get extended.
User discretion!
Rounding bottom (Cup & Handle) formation breakout?? #US10YCharts show breakout of rounding bottom formation on Weekly/Monthly charts of US 10year yields. Already got monthly closing above the breakout line.
If sustains above the breakout line minimum target for 10y yield will be around 5.5/6.5 pc. If so, there will bloodbath across all asset classes. Only below 3.4/3.3 negates the idea.
Brace! Brace! Brace! If true, difficult times ahead.
Hope I'm wrong.
Happy trading
Recession Incoming? Here is what the technicals say
US10Y-TVC:US02Y
Economists: Recession incoming!
World Leaders: Recession is out of the books.
Whom to believe? Here is my analysis from a technical standpoint👇
As someone who believes in data driven decision making, the technicals point towards a recession. How so?
When the difference between the 10 year bond yield and 2 year bond yield becomes negative, it is known as an 'Inversion in bond yield curve' and this inversion has been a strong indicator in predicting recession.
Since this chart (US10Y-US02Y) started back in 1976, whenever the curve went into the negative zone, we experienced a recession shortly after.
So the question now is, are we in the negative zone? YES!
Recession incoming? Most likely yes!
To all my connections in the field of finance especially, I'd love to know your thoughts on the same below in the comments 👇
Follow AVZ_Trades for more such content
#finance #data #recession #bonds
US10Y aheading to cross 2% this timeUS10Y has been trending in a downward channel, currently aheading towards its resistance. It acts as a leading indicator to US equity indexes and works in contrast to major benchmarks.
Disclaimer: View for Educational purpose only, not to be taken as trading/investment advice.
US10Y scaring the markets again?I do not have the detailed economic understanding of this matter but have observed that a rise in the US 10 year treasury yields leads to a overall feeling of fear and turmoil in the markets. Back in the March and April of 2021, US10Y was continuously making news as it was reaching levels of about 1.75, with commentators discussing how a test of the levels of 2 and beyond could lead to a sharp sell off in the markets. But, it failed to move past decisively beyond the 1.75 levels as market on the chart.
_____________________________________________________________________________________________________________________________________________________
Since then I have been following this ticker, US10Y corrected back to levels of around 1.12 which it failed to break below in July and August. After that it had started forming higher lows leading to bullish structure. It was consolidating just below 1.38 trying to break through it, which it finally did on the 23rd of September.
_____________________________________________________________________________________________________________________________________________________
In short, if this trend continues upward leading the US10Y to the April highs of 1.75 and beyond, we could observe the markets struggling to move ahead, also possibly correcting. It would be prudent to keep watch.
Manage risks properly and trade your plan.
Like and follow for more. :)
Rising bond yields are dollar bearishThe number of classic relationships that I have to debunk just to be on the right side and convince the world is just overboard. And the charts are as straightforward as they can be. So here goes stupidity. Rising bond yields are not dollar bullish, at least not in the time frame of this chart. So when bond yields rise then the dollar actually falls. Yes naturally if I sell US bonds and take my money out of the US, the dollar should fall, right? They why do you expect the opposite? Because some overnight Journo on Bloomberg says so? Or because you were taught this in economics class? Interest rate parity in your Forex lecture. Then you find it very hard to accept or explain the chart below. Or maybe you find periods in the chart when the two are directly correlated to make your point. The answer is simple it is a risk on trade till it is not. The day falling stocks cause bond yields to decline, the dollar will rise and it is time to take risk off the table by reducing your market exposure. Till that happens it is all noise. Weak hands get cleaned out this way. Bond yields started to breakout higher above the 2021 high recently and the dollar fell. This is good for risk assets, unless we see that trend clearly change I do not see a reason to be concerned about incremental changes in bond yields.
US10YAt their policy meeting in December, FOMC participants agreed to double down on QE pace to close the same by Mar’22 amid growing concerns about hotter inflation. Fed officials also began discussing at the December meeting about balance sheet (bond holdings), and some policymakers are pushing to start shrinking them sooner and faster than they did after an earlier asset-purchase (QE) program after 2007-08 GFC. Markets would see that as a form of tightening monetary policy because it would signal the central bank’s desire to deliberately slow the economy.
Once the Fed stops buying bonds/assets (after QE tapering), it could keep the holdings steady by reinvesting the proceeds of maturing securities into new ones, which should have an economically neutral effect. Alternatively, the Fed could allow its holdings to shrink by allowing bonds to mature, or runoff (QT-Quantitative Tightening).