Hi guys, thank you for the support! I will have this analysis out each weekend as well as daily updates throughout the week, if you guys like what I'm doing hit the "follow" button and you will get a notification each time I post a video or chart!
we have all the infos now that the move on gold and silver yesterday was purely manipulative by JPMorgan (they prefer to pay the fine by the SEC than what they would have had to pay in case of activation of an incredible number of option contracts) .... that said the good news is that while silver and gold were dropping like crazy it did not affect usdjpy, proving again that the move on silver and gold is a one shot one day artificial move, it is a good news at it tends to prove that the market doesn't and cannot go much higher on usdjpy otehrwise yesterday it should have done it without hesitation
UnknownUnicorn266486
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Couldn't agree more @lapin_eliott, Friday was a perfect stop run! This asset is on sale and no one wants it right now!
Netsoft24
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@lapin_eliott, Couldn't agree more. I was shocked when USDJPY was stagnant. Usually it will move in tandem with Gold but it just sit there stagnant..
@ROB.Reynolds Please continue to keep up the good work. I love your analysis. Also I hope your daughter is all well now. =)
tailzz
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Thanks for your top down big picture!! Keep up the great work!
Thanks for your great analysis. One point to add. I agree that the lower the yields go like US02Y the more bearish USD will be. But when FED has been hawkish on its monitory policy we started to see a flow of capital coming into US bonds including Junk bonds (High Yields bonds) as it acted as a safe heaven. So gold probably is not a safe heaven for a while. As US bonds rising we would see Yields retreated to respond the rise in Bonds. Treasury notes probably continue rallying.
Overall I would like to thank you for your great work. Many thanks
UnknownUnicorn266486
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Hi @khansalarehsan thank you for the kind words! My point with the 2 year yield was not directly related to a weak dollar. The curve on eurodollar futures out past December 2019 has inverted
(eurodollars being deposits denominated in U.S. dollars at foreign banks). This screams policy error, the only prior two occasions came in 1994 & 2000. In both occasions, the Fed had stopped
raising rates. Where my analysis comes on the 2 year yields, its dropping. The short end of the curve is most sensitive to Fed Funds rate and this is potentially confirming to me that rate hikes
slow down. In both occasions the dollar peaked.
(an inverted eurodollar curve suggests funding issues, we are already seeing issues in Brazil and more recent Argentina)
UnknownUnicorn266486
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@khansalarehsan, just to add one more point, high yield credit correlates with GDP expansion. With the corp tax cut we are seeing earnings expansion, the elevated PMI's also suggest GDP is still trending higher at a nominal level so I would continue to see higher yield credit do "ok" but not an area I would see value in at this stage in the cycle.
Sovereign yields are more sensitive to inflation/deflationary environments. Commodities cause a transitory pop in inflation and vice versa (which can be referenced by 10 year breakeven rates), certain commodities have been rolling over namely crude oil, although still positive on a year over year basis. Its all leaning towards potentially lower yields to come at least in the short term.