Category: Bonds

Bonds, Inflation & Deflation, Public

Bonds continue to indicate contrarian potential

As the almighty Fed (of Oz) prepares to render its decision… Treasury bonds continue to hammer out interesting daily chart patterns. Some notes on this… The daily charts say one thing but the long-term charts (e.g. the 30yr yield ‘Continuum’) say another, speaking to time frames and a wider angle perspective. Markets, while chaotic this year, are playing ball with bonds in that there are … Continue reading Bonds continue to indicate contrarian potential

Gary
Bonds, Interest Rates, Notable Posts, Public

30yr on the way to 2.5%?

It would seem so, as the current NFTRH target awaits despite a hawking Fed While day to day it can be frustrating watching a plan play out in a volatile market, we have nailed the interest rate backdrop that the now hawking Fed has been whipsawed by and is trying to catch up to. But over educated eggheads will be over educated eggheads, and as … Continue reading 30yr on the way to 2.5%?

Gary7 Comments
high yield credit spreads
Bonds, Market Indicators

High yield credit spreads continue to rise

Rise in high yield credit spreads threatens recession A rising spread indicates disfavor toward junk bonds (oh so favored during speculative risk ‘on’ phases) and this behavior can eventually either grind its way toward economic recession or spike its way there (ref. 2020). Here is a longer-term view. Whether it grinds (2000) or spikes (2008 & 2020) a continued rise would eventually be a recession … Continue reading High yield credit spreads continue to rise

Gary1 Comment
Bonds, Market Indicators

The new non-inflationary curve steepener

10-2yr Yield Curve steepening, but not due to inflation While the headlines continue to blare inflation 24/7, an indicator of the 2020-2021 inflation diverges the hysteria. Sure, the yield curve is doing what it did when it led the inflationary hysteria of today. It is steepening. But the trick is to realize that a yield curve can steepen under either inflationary or deflationary pressure. At … Continue reading The new non-inflationary curve steepener

Gary
Bonds

Just another ‘bonds are diverging inflation hysteria’ post as they ready the goons

As they ready the FOMC minutes to be inflicted upon the markets… We note that anti-inflation Treasury bonds are still in bounce mode and hence, yields are still in pullback mode. For “best of breed” top down analysis of all major markets, subscribe to NFTRH Premium, which includes an in-depth weekly market report, detailed market updates and NFTRH+ dynamic updates and chart/trade setup ideas. Subscribe … Continue reading Just another ‘bonds are diverging inflation hysteria’ post as they ready the goons

Gary
Bonds, Inflation & Deflation

Wouldn’t you know, T-bonds continue to posture to rally

Amid hysterical inflation headlines, Treasury bonds remain firm Of course, inflation is yesterday’s news. That was the news that bonds had been reporting since mid-2020 when yields bottomed and turned up, culminating with a breakout from the Continuum’s limiting moving averages and a possible halt here below the key November, 2018 high. Now bonds are reporting something else. It’s no surprise that as the inflated … Continue reading Wouldn’t you know, T-bonds continue to posture to rally

Gary
Bonds, Inflation & Deflation

Bonds again diverge inflation headlines

Bonds up today despite alarming inflation headlines The hysteria of the moment, served up as usual by the mainstream financial media off of backward looking data/results, has not resulted in bonds getting clobbered as would normally be expected. As was the case after last week’s CPI hysterics, Treasury bonds of all durations are positive today. This despite the very real and concerning inflation data behind … Continue reading Bonds again diverge inflation headlines

Gary
Bonds, Inflation & Deflation

Does this look like inflation?

I didn’t think so; not this week. Well of course they have not even taken the SMA 50 yet, but isn’t it funny how during yet another inflationary ‘lagging data’ hype week we have Treasury bonds – among the worst casualties of the inflation created in 2020 – rising? The thing is, it was lonely when we were forecasting inflation in mid-2020 and it is … Continue reading Does this look like inflation?

Gary
Bonds, Interest Rates, Market Indicators

New trend being set on the 10-2yr Yield Curve

Yield curve steepening, but there’s more to the story The yield curve can steepen under inflationary pressure (e.g. 2020) or deflationary pressure (e.g. 2008). The most recent steepener was inflationary. This new one well, my bet is the opposite. So to repeat, everyone is on one side of the macro boat and a post-inversion steepener usually comes with an economic bust. This market is rapidly … Continue reading New trend being set on the 10-2yr Yield Curve

Gary2 Comments
Bonds, Interest Rates

In order to change the secular trend in the 30yr yield…

The 30 year Treasury bond yield is in its multi-decade downtrend until the November, 2018 high is taken out In early 2021 we projected the potential for an Inverted H&S, which would theoretically measure to the 4% area on the long bond, at the lateral resistance area noted on the chart. That would set a new trend in the secular picture for the yield and … Continue reading In order to change the secular trend in the 30yr yield…

Gary2 Comments
Bonds, Inflation & Deflation, Market Indicators

The Continuum: Through the limiters!

Inflation pushes the 30-year Treasury bond yield through long-term moving average trends! Okay, let’s take a breath. I don’t like to use ‘!’ in titles or even in articles. In fact, when I see too many of them I immediately think that someone really REALLY wants me to see their point. That said, the signal shown below is pretty important. It’s in-month with a monstrously … Continue reading The Continuum: Through the limiters!

Gary1 Comment
Bonds, Market Indicators

High Yield credit spread rising again

Junk bond indications under rising pressure again When last we updated the High Yield spread it was easing in line with the market relief that came with a market bounce from extremely over-bearish short-term sentiment. Well, now it is back on its rising theme as junk bonds go back out of favor relative to higher quality bonds. It’s an indication of risk ‘off’ behavior as … Continue reading High Yield credit spread rising again

Gary1 Comment
Bonds, Market Indicators

Relief, in the form of credit spreads

High Yield credit spread eases On March 15 we noted that High Yield option adjusted spreads were rising, which was a distinct economic/financial negative if it were to continue. It did not continue. Along with the recent market rally the High Yield index spread has pulled back far enough to no longer be a concern, at least in the short-term. For “best of breed” top … Continue reading Relief, in the form of credit spreads

Gary
indicators
Bonds, Market Indicators

Yield Curve inversion upcoming

Only a few ticks away from an inverted Yield Curve With the free bond market driving up 2 year yields while the Fed holds out from going hawkish (hawk talk is cheap, actions are not) it is a confusing backdrop because… …inflation hype is everywhere, a curve flattener is not usually consistent with a big inflationary backdrop, and with respect to commodities and inflation… But … Continue reading Yield Curve inversion upcoming

Gary