We have been noting that a 10 year break even rate of around 1.6% was the line in the sand on a continued ‘inflation trade’ after the bounce. The 10yr b/e has broken below it. But one need not try too hard to imagine a potential Inverted Head & Shoulders with the right side shoulder possibly being constructed now. It could extend down to 1.4% like the left side did.
In line with this, the daily view of the above indicator’s fellow, the TIP-TLT ratio, is in a bearish stance.
While nominal TLT, usually a risk ‘OFF’ asset, is looking bullish.
Subscribe to NFTRH Premium for your 25-35 page weekly report, interim updates and NFTRH+ chart and trade ideas or the free eLetter for an introduction to our work. Or simply keep up to date with plenty of public content at NFTRH.com and Biiwii.com. Also, you can follow via Twitter @BiiwiiNFTRH.