US markets saw some light chop in the overnight session, with the Dow and S&P trading relatively flat from yesterday's close, and the Nasdaq, and Russell, trading down around 0.30%. The US 10Y yield continued it's rally toward the 100MA (w), with a print of 1.331% before cooling off toward the 1.31% level. The 2s10s spread is now the widest in almost 3 years. As we discussed yesterday, whether we're about to see diminishing demand, or a notable increase in supply for long dated treasuries, it's important to keep an eye on the long end of the curve for hints of a potential market correction. Markets are ripe for a 15 - 20% correction, so trade with caution.
We should be getting some insights from the FOMC minutes later on today on the future outlook of the economy, and current policy stance. It's unlikely we see much of a change in the outlook, but slowly we'll begin to hear mention of YCC, and potentially the impact that rates could have on borrowing/ near term market performance. According to Arne Petimezas, analyst for AFS Amsterdam, "Regarding the bond market sell-off, things are finally starting to get serious as real yields are on the rise, driven by bets of central banks tightening sooner than previously expected.” Things could get very interesting if the 10Y yield hits 1.50%.
In crypto, Bitcoin continues it's march higher, with a $51k handle now under it's belt. We're not seeing anything unusual in the latest crypto rally, because essentially the higher the implied beta of the security, the better it seems to do in this new "risk free" market. In metals, Gold, Silver, and Platinum, all receded, with Platinum seeing the largest pull back of 2.25%. We're now looking at $1250/oz.
Finally, on the data front, Retail Sales came in hot, and surged 5.3% vs 1.1% expected, leading to the highest YOY rise since 2011. Core retail sales rose by a whopping 11.8% YOY, which according to Zero Hedge, is the biggest rise in history. Hey, I guess when money is free, people spend it. Producer prices are soaring with PPI and Core PPI coming hot at 1.3% vs 0.5%exp, and 1.2% vs 0.2%, respectively.
Markets don't look happy...
Thanks for your time today guys, and I hope you enjoyed the analysis. Head on over to www.hedgeoftheworld.com for our live analysis to begin shortly. Cheers! Michael.
*The information and analysis shared in this post is not financial advice. Always conduct your own analysis and research. I am/ we are currently holding positions in UVXY, HUV, HQD, QID.
We should be getting some insights from the FOMC minutes later on today on the future outlook of the economy, and current policy stance. It's unlikely we see much of a change in the outlook, but slowly we'll begin to hear mention of YCC, and potentially the impact that rates could have on borrowing/ near term market performance. According to Arne Petimezas, analyst for AFS Amsterdam, "Regarding the bond market sell-off, things are finally starting to get serious as real yields are on the rise, driven by bets of central banks tightening sooner than previously expected.” Things could get very interesting if the 10Y yield hits 1.50%.
In crypto, Bitcoin continues it's march higher, with a $51k handle now under it's belt. We're not seeing anything unusual in the latest crypto rally, because essentially the higher the implied beta of the security, the better it seems to do in this new "risk free" market. In metals, Gold, Silver, and Platinum, all receded, with Platinum seeing the largest pull back of 2.25%. We're now looking at $1250/oz.
Finally, on the data front, Retail Sales came in hot, and surged 5.3% vs 1.1% expected, leading to the highest YOY rise since 2011. Core retail sales rose by a whopping 11.8% YOY, which according to Zero Hedge, is the biggest rise in history. Hey, I guess when money is free, people spend it. Producer prices are soaring with PPI and Core PPI coming hot at 1.3% vs 0.5%exp, and 1.2% vs 0.2%, respectively.
Markets don't look happy...
Thanks for your time today guys, and I hope you enjoyed the analysis. Head on over to www.hedgeoftheworld.com for our live analysis to begin shortly. Cheers! Michael.
*The information and analysis shared in this post is not financial advice. Always conduct your own analysis and research. I am/ we are currently holding positions in UVXY, HUV, HQD, QID.
