As I have been watching less and less crypto YT'rs, I have been drawn to bonds and bond data analysts as they seem to have a better understanding of overall market economic shifts and since I haven't published anything in a while, I wanted to get a brief heads up.
Just a quick look at of the target rate probability ahead of the 21st of Sept, 2022 Fed meeting. Currently expected earnings show 82.0% as of today:
www.cmegroup.com/tra...untdown-to-fomc.html
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FED RESERVE BONDS 101
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For those unfamiliar with how Fed Funds Futures works here is a brief description, obvious if if this is all familiar knowledge you can skip smartee
The Federal Reverse Bank of NY (FRBNY) gathers funds daily of participating banks and broker dealers using a volume weighted average using the daily calculating the (E)ffective (F)ed (F)unds (R)ate (EFFR) as report by the Federal Reserve Bank of NY of participating banks and broker dealers.
ZQ charts typically track the 30-Day Fed Funds Futures Contracts. The contracts unit size is $5,000,000 per contract, contracts are listed monthly, extended 36 months or 3 years of yield curve
Fed Funds Futures are traded in IMM index terms as a price rather than a rate, the price is calculated in these terms:
100 - (IMPLIED RATE) = (FED FUNDS PRICE)
For example, with the implied price of 4.4% as expected by April or sooner
100 - 4.4% = 95.600
If is important to remember that the (F)ederal (O)pen (M)arket (C)ommitee, (FOMC) is backwards looking and sets each contract rate during each FOMC meeting obviously, the first fed futures contract rates to be affected by a rate change would be the next deferred contract month and not the contract month in which the meeting takes place, that is why investors are looking into April 2023 yield expectations as the market tends to price in future market behavior.
Obviously there are more than mechanics involved in calculating expectations besides FOMC reports such as other inflation expectations, and employment statistics, etc.
=^..^=
Just a quick look at of the target rate probability ahead of the 21st of Sept, 2022 Fed meeting. Currently expected earnings show 82.0% as of today:
www.cmegroup.com/tra...untdown-to-fomc.html
-------------------------------
FED RESERVE BONDS 101
-------------------------------
For those unfamiliar with how Fed Funds Futures works here is a brief description, obvious if if this is all familiar knowledge you can skip smartee
The Federal Reverse Bank of NY (FRBNY) gathers funds daily of participating banks and broker dealers using a volume weighted average using the daily calculating the (E)ffective (F)ed (F)unds (R)ate (EFFR) as report by the Federal Reserve Bank of NY of participating banks and broker dealers.
ZQ charts typically track the 30-Day Fed Funds Futures Contracts. The contracts unit size is $5,000,000 per contract, contracts are listed monthly, extended 36 months or 3 years of yield curve
Fed Funds Futures are traded in IMM index terms as a price rather than a rate, the price is calculated in these terms:
100 - (IMPLIED RATE) = (FED FUNDS PRICE)
For example, with the implied price of 4.4% as expected by April or sooner
100 - 4.4% = 95.600
If is important to remember that the (F)ederal (O)pen (M)arket (C)ommitee, (FOMC) is backwards looking and sets each contract rate during each FOMC meeting obviously, the first fed futures contract rates to be affected by a rate change would be the next deferred contract month and not the contract month in which the meeting takes place, that is why investors are looking into April 2023 yield expectations as the market tends to price in future market behavior.
Obviously there are more than mechanics involved in calculating expectations besides FOMC reports such as other inflation expectations, and employment statistics, etc.
=^..^=
Trade closed manually:
I don't know why this isn't running TRADINGVIEW!!! but it's pissing me off. Anyway, the key takeaway for sept yields and other expected earnings ZQ mo charts to watch out for is the inflation rate to rise near the level of each chart as a means to determine how healthy/unhealthy the markets are or if we are really heading for a crash
Current 100-ZQU2023 at 4.585 vs inflation rate 8.3% would be an impossible level to reach but watch as ZQJ, ZQJ, ZQU charts get closer to 5 after each FOMC meeting. Also watching HYG dropping to new lows as well as the yield curve.
ikdy no-one is even watching this but it's the first chart I check every morning, just sayin', if ur heavily invested in anything, crypto, stocks, It's always better to be prepared yes?
▀▀█═╡🤡╞═█▀▀
(M)iles (M)addox
Current 100-ZQU2023 at 4.585 vs inflation rate 8.3% would be an impossible level to reach but watch as ZQJ, ZQJ, ZQU charts get closer to 5 after each FOMC meeting. Also watching HYG dropping to new lows as well as the yield curve.
ikdy no-one is even watching this but it's the first chart I check every morning, just sayin', if ur heavily invested in anything, crypto, stocks, It's always better to be prepared yes?
▀▀█═╡🤡╞═█▀▀
(M)iles (M)addox
Trade closed: stop reached