US2y to stay below 1.500The chart patterns indicated that the US2Y yield is going to break and stay below 1.500.
The implications are that the spread (or difference) between US10Y minus US2Y is getting smaller. This, in turn, is suggesting reversion or a correction in US Indices towards the mean
You can see the initial chart pattern A, which led to the corresponding drop to point 1, and chart pattern B, which led to drop point 2
I think the US2Y will hold at 1.418 and then fall to 1.365 as the maximum potential drop
Search in ideas for "US2Y"
US2Y Treasury Yield vs Gold The correlation between the 2Y & gold indicates that when the US2Y peaks, there is a US recession & gold rallies to new highs subsequently after.
** 1 = Peak in US2Y ( 1989 ) did not see a rally in gold because gold was depegged from the USD in the mid 1970's.
2 = Peak in US2Y ( 2000 ) saw a massive rally in gold as investors look for a safe haven from the incoming recession.
3 = Peak in US2Y ( 2007 ) saw a massive rally in gold as investors look for a safe haven from the incoming recession.
4 = Peak in US2Y ( 2020 ) saw a massive rally in gold as investors look for a safe haven from the incoming recession.
Speculation
5? = Do we see a continuation of the opposite correlation between the US2Y & Gold when the US2Y peaks?
I believe so. However, I see two scenarios for gold if & when the US2Y peaks.
Scenario #1: Gold rallies to new highs after the peak in yields
Scenario #2 ( Base Case ): After peak in US2Y, Gold rallies to tests previous high & fails to make new highs.
Expecting yields to take a breather soonAll goes down to CPI readings this Thursday but purely from a technical perspective, US2Y and US10Y are expected to cool down in the next few weeks from their current trading ranges that could go up to 1.4% and 2.1% respectively. If invalidated and they go higher into the coming week, expect more volatility and suffering for the stock market.
US2Y
US10Y
Tut Tut - US10Y-US2Y rises to highest in 3 yearsCurve Steepening is alive and well as the basis point difference between the US 10-year bonds and the US 2-year bonds reaches its highest level since 2017. This largely due to the Fed purchasing of shorter term bonds every month as part of its QE program to support the economy. Expect this trend to continue as the Fed maintains its support and refrains from purchasing longer dated bonds. However, should the Fed announce they are now going to purchase longer dated bonds, then a quick reversal is on the cards.
US10y vs FED rate. Should u put $ into bank or buy gold? 10/Jan/US2Y and 10Y bonds yields always “follow” FED rate paths. Now we “see” some “experts” encouraged us to “save” money into banks (especially USD denominated a.c) to gain higher rate. Hope to enjoy high fixed guaranteed return like early 1980s which was above 10%!!! Looking at those chart and gold price do you think “fixed deposits “ into bank is “worth” as investments?
US2Y with DXY - moving togetherSince the begining of the rise in 2 year yield, USD was following closely. However, USD did not follow rates to new high, but diverged instead. Note that the momentum in 2y yield is slowing, which could portend fall in interest rates in not very distant future, which could in turn hurt USD.
Alarm bells ringing on the 2's 5's curve...Recession is callingThis chart comes after a conversation with Citi... only 4 times in the past 30 years has the US 2's vs 5's curve inverted whilst being in an upward moving yield environment, via Fed QT.
We know from history a few lessons;
(1) Every other time this happened it ended badly for the global economy.
(2) A Fed that lags will only add fuel to the flames .. "it's different this time"...
(3) The longer the delayed reaction from Fed, the worst the blow in Equity markets. Assuming Fed moves in July (even with a more aggressive cutting profile e.g 50bps) it is still the 3rd longest delay over this time period. A 25bps is a 'done-deal' so should the Fed buckle and not move (very unlikely) it will mean that markets look at September which would then make this monetary policy 'delay' just marginally quicker than 2000/2001.
Best of luck those tracking for the end of the cycle... this chart will be one for the history books.
Weekly U.S. Treasuries Analysis (Week 07/2023)First Thing First: This analysis is for “general overview only” as it is solely based on price action. That’s why it is called momentum analysis in the first place. Support/Resistant, Volume Macro view nor any other factors are not used during write up. Refer to the individual pair analysis for a more comprehensive write up.
US1Y: Bullish
US2Y: Bullish
US5Y: Bullish
US10Y: Bullish
US30Y: Bullish
S&P Index: Bearish
WK 07 (11 Feb 2023)