majicktrader

majicktrader

So far the sudden creep up in the Australian 3 year yield has gone unnoticed. But it has jumped massively in the last two weeks from ​0.07% to 0.26% For months the RBA has kept the rate under 0.10%. However, this time it has left the rate unchecked. According to Michael West, this is the RBA testing the market. The three year rate is the rate that Banks use...

majicktrader

I keep reading on Trading View that US Ten Year yields are going to fall to 1.2% and this means Bitcoin is going to go back up. Take a look at the chart - there is little correlation between US 10 year yield rates and the price of Bitcoin. A 50% correlation at best and even if this was higher, correlation doesn't imply causation. Just because Bitcoin has...

majicktrader

Last night yields fell across the board with the US10Y falling below 1.5% during the monthly US 10 Year Treasury Auction. Investors are still willing to buy bonds, indicating that investors don't expect rates to rise anytime soon. This is despite recent hot inflation numbers (April CPI increased 4.2% on an annual basis - the fastest rise since 2008) and the market...

majicktrader

This chart measures the average strength of the Australian dollar against the USD, GBP, JPY and EUR. After gaining significantly since November 2020, the Australian currency has been trading sideways against its major partners since the start of the month. Australia has benefited from a number of fundamental factors including a strong rebound from Covid, rising...

majicktrader

The NZDUSD popped over 50 pips after the RBNZ released its latest economic statement at the RBNZ Rate meet today. NZ10Y rates which have held up better than the US rates will not doubt continue to increase at the chance that the RBNZ will move sooner than later when compared with the Dovish Fed.

majicktrader

US 10 Year Rates have been trading sideways this quarter and there are number of reasons for this: Ready bond buyers - With yields above 1.5% this means that hedge fund traders are required to adjust their Bond/Stock ratio of holdings in their portfolios accordingly. With the front end of rates curbed by Fed policy, bond buyers have nowhere to go but to the long...

majicktrader

The NZDUSD pair (affectionately known as the kiwi) hit a new March low today of 0.70879 during a risk on Asian session. NZ 10 year rates have also dropped to a March low squeezing the NZD and USD carry trade to its smallest margin this month. This drop in NZ 10 Yields is reflective across the globe, but also helped by the RBNZ buying bonds at the longer end of...

majicktrader

The price of US Ultra T-Bonds have fallen below a key level of 180.00 (Trading view's instrument is decimalised and shows 18000), this is on the rise of US longer dated yields approaching nearly 2.5%. The 30 Year Rate is projected to reach 2.75% and even 3%, based on rising inflation as the US economy is expected to rival that of China's growth in 2021 - around...

majicktrader

As the US 10 year yields rise - they impact more than just the price of stocks. The Carry trade or difference between a funding currency and investment currency is also impacted. While both New Zealand and the US ten year rates are rising, the difference between New Zealand 10 Year Yields and US 10 Year rates is diminishing. This makes the NZDUSD carry trade less...

majicktrader

While the US has been recovering with a fast vaccine rollout and sizeable stimulus cheques posted to its citizens. It has suddenly dawned on investors that Europe is far behind in its recovery. Recent new lockdowns in Italy and France, along with slower than expected vaccine rollouts, sent the benchmark commodity south overnight on concerns that global demand is...

majicktrader

The RBA has a stated yield control curve target of keeping the 3 Year Yield at .10% - the same as its overnight cash rate. However, the market was moving in a direction to push this higher in anticipation of rates being lifted faster than the RBA had previously stated. Last week the RBA decided to punish those short investors in the three yield by stopping the...

majicktrader

Rising US yields are attracting those investors who borrow Japanese Yen at the much lower rate and and then purchase American dollars to earn a higher return than in Japan - knowns as the carry trade. The correlation shows times when USDJPY carry trade is a key driver of the currency pair, however it is not always, because these are both go to currencies in times...

majicktrader

Bond Yields are going higher and fast. Since January bond yields have increased across the board, rising quickly in the USA, Australia, New Zealand and Canada especially. Economies are rebounding and looking to show significant GDP growth during 2021 thanks to the rollout of the vaccine and reopening. This growth may (In the case of the US) be fuelled by...

majicktrader

As the gap rapidly grows between the Australian 10 Year Rates and Japanese 10 Year Rate, the AUDJP carry trade becomes even more desirable. This week as the pair soared above 83.50 - levels that it has not seen since late in 2018 and the currency pair is currently trading around 83.6. There are several fundamental factors driving this trend. Australia's economy...

majicktrader

The Gundlach ratio tracks the ratio of copper prices to gold as an indicator of future US 10 Year Yields. Gundlach believes in the predictive value of the ratio since copper is sensitive to swings in the economy, while gold climbs when investors get frightened. You can see the correlation with the US 10 Year Yield rate is around at least 95% most of the time,...

majicktrader

NZ Ten Year Yields have rocketed up in recent days, reaching a high of 1.54% yesterday. This is a major climb from its yearly opening where it hovered around 1%. While Australian 10 Year Yields are also growing this year, a more dovish RBA has helped to cap yield gains. At its recent meeting, the RBA opted to increase its quantitative easing program by a further...

majicktrader

Crude's reflation rally continues with 8 days of rallying in Fed. Since the month opened, it has climbed almost $6.50 a barrel to trade around $58.60 at present. $60 looks well within sight - providing upward momentum continues. There may be some resistance at around $65.50 the yearly high reached in January although the market well move past that price level in...

majicktrader

Despite Stocks heading higher, 30 Year Yields are also climbing about to hit 2% - a level they were last at in Feb 2020. US CPI prints this week will be very interesting to see if the momentum continues