Another inflation headline, another contrary bond market reaction

Core consumption rose, Treasury yields pull back Treasury bonds are still in downtrends, and thus yields are still in uptrends. So the inflation play is technically not yet broken from a Treasury bond POV. But it is interesting how the inflation trades continue to unwind (check out commodity tracker DBC ticking a new low today after failing to get back above its daily SMA 50) … Continue reading Another inflation headline, another contrary bond market reaction

NFTRH+; 30yr Treasury yield ‘Continuum’ status

Just a quick snapshot to update the Continuum’s status. Please recall that we are looking for the yield to make a lower high to the 3.5% (actual: 3.45%) high of November, 2018. Today’s tick has hit 3.3%. Got to love the markets, always pushing things to the limit. The bottom line implication would be that a notable change in the macro could well happen this … Continue reading NFTRH+; 30yr Treasury yield ‘Continuum’ status

The Inflation Mutation

This is not your Grandpa’s Inflation problem The Fed is starting to play catch-up with inflation signals from the bond market as evidenced by the Fed Funds Rate finally being pulled upward by the implications of the rising 3 month T-bill yield, among other more obvious signals like the long since rising 2yr Treasury yield and ongoing inflation headlines we read about every day. After … Continue reading The Inflation Mutation

yield curve

Yields up, 10yr-2yr Yield Curve still in steepening posture

The 10yr-2yr Yield Curve continues to posture for steepening The recent secondary inversion (initial inversion was August, 2019) continues to look like it has birthed a bouncing baby steepener. The question, however, is whether a new steepening would be inflationary or deflationary. Today is inflationary signaling with nominal yields up. That’s a microcosm driven by geopolitical stuff. I am not going to bet heavily one … Continue reading Yields up, 10yr-2yr Yield Curve still in steepening posture

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?

Not inflation friendly

A few inflation unfriendly pictures while everyone huddles on that side of the boat I don’t know. Maybe they’ve obsoleted contrarian theory. Cancel culture and all. But just in case they haven’t there are these pictures to consider. There are more, but this gives the tenor of the situation from a contrary perspective. 2yr Treasury note is firm and diverging upward by RSI. Doctor Copper … Continue reading Not inflation friendly

The Continuum; center stage during next week’s inflation data fest

The 30yr Treasury yield takes center stage as inflation data come in With next week’s inflation data orgy we may find out if this chart is truly on its way to a 4% long bond yield and maybe even von Mises’ crack-up-boom territory or just a more epic whipsaw and reversal. The 30yr yield is definitely in full frontal inflation mode at the moment. It … Continue reading The Continuum; center stage during next week’s inflation data fest

ism

April ISM and the forward economic view

ISM hints at forward deceleration Uncle Buck As a former manufacturing guy I am well aware of how monetary policy and the state of the US dollar affects US manufacturers. But I have not been that guy for so long now that I tend not to look at it as closely anymore. But the current time seems appropriate for a review of the manufacturing sector. … Continue reading April ISM and the forward economic view

As the Continuum leads commodities upward…

As long-term Treasury yields lead the inflation trades… Let’s remember that the Yield Curve is once again steepening and a new steepener can be inflationary (likely von Mises crack-up style), deflationary (where everybody would get caught off sides) or a combination of both before one economic condition wins out. An inflationary steepener would not be inconsistent with a continued rise in the Continuum and a … Continue reading As the Continuum leads commodities upward…

Behold the sheer beauty of the Continuum

The long bond’s yield pierces the limiters We have had this very event on radar since we began projecting it as the Fed was inflicting the inflation upon the financial markets (to fulfill its goal of bailing out the ‘asset owner’ class) in Q1 2020. This will be a decision point. The decision will be between an inflation like we have not witnessed before (von … Continue reading Behold the sheer beauty of the Continuum

Yield Curve inverts; gold awaits

Yield Curve inverts deeper than August, 2019 Like the larger media this tiny little spec within the media reports the news to you. The 10yr-2yr yield curve has inverted (ref. Yield Curve inversion upcoming). Now, what does it mean? Well the first thing it usually means is not to panic (especially now that High Yield credit spreads are easing), but do tune out the media … Continue reading Yield Curve inverts; gold awaits

The Yield Curve flattener and a coming transition

As the Yield Curve flattens, this inflation is different from the 2020 inflation In 2020 an inflationary yield curve steepener was in the bag as the Fed dropped and pinned the Funds Rate and sucked up every bond it could get its hands on (in order to monetize/print). The bond market made the logical signals about the resulting inflation as the short end was pinned … Continue reading The Yield Curve flattener and a coming transition

2 years later inflation drives the Continuum to target

30yr Treasury yield finally hits target Ah, but it’s not that simple. Targets are not necessarily stop signs. It’s at the decision point. Will the yield do what it has not done in decades and break the limiters for real (instead of just poking them as before) or will it do what it has done for decades, which is to fail here? People mocking the … Continue reading 2 years later inflation drives the Continuum to target