I've been watching the 10-year treasury bill yields lately and we can see some very interesting technicals that allow us to draw a few scenarios on what could happen with rates. Above 3.413 we are likely to see a significant rise in yield, while a consolidation here would lead to more "easing" in this and other markets, globally.
Jim Rickard, former general counsel for LTCM, market analyst, and author wrote on his blog "A dollar shortage seems implausible in a world where the Fed printed $4.4 trillion. But while the Fed was printing, the world borrowed over $70 trillion (on top of prior loans), so the dollar shortage is real. The math is inescapable." (due to tradingview policy I cannot pate the link so please manually visit Rickard's post). Based on this observation, there is a real possibility that yield breaks the 3.413 level and triggers a bullish wave in the bond market's yield. Who knows what this will do to equity markets, specifically, the corporate bond market. Junk bonds already look shaky. Will the US' Federal Reserve allow for this scenario? How will this impact China's severely over-indebted economy that has "shorted" the US dollar hard?
Monthly view:
The trend here is clear and we are close to kissing the make it or break it level.
Jim Rickard, former general counsel for LTCM, market analyst, and author wrote on his blog "A dollar shortage seems implausible in a world where the Fed printed $4.4 trillion. But while the Fed was printing, the world borrowed over $70 trillion (on top of prior loans), so the dollar shortage is real. The math is inescapable." (due to tradingview policy I cannot pate the link so please manually visit Rickard's post). Based on this observation, there is a real possibility that yield breaks the 3.413 level and triggers a bullish wave in the bond market's yield. Who knows what this will do to equity markets, specifically, the corporate bond market. Junk bonds already look shaky. Will the US' Federal Reserve allow for this scenario? How will this impact China's severely over-indebted economy that has "shorted" the US dollar hard?
Monthly view:
The trend here is clear and we are close to kissing the make it or break it level.
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Hmmmm
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Breakout! Looks like yeilds on the 10 year are falling and we are closing in on the 2 year yields which is leading us closer to "inversion"!
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Big week. Will the Fed contiune to raise rates until we kiss the key level?
Is this short-term relief only? Look at the markets, they are sell-off anyway.
Is this short-term relief only? Look at the markets, they are sell-off anyway.
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