US03M chart before another plunge. The chart shows the forward rate curve for US 3-month government bonds. I've analyzed this curve many times. It can be seen that the chart makes small movements. Furthermore, it can be seen that the anti-movement ATRs (white rectangle) have a strong pressure on the exchange rate. In the event that the exchange rate falls out of this narrow-band siding, another sharp drop would occur. What it means. That the three-month forward dollar rates are coming under pressure again. The market expects another interest rate cut. This could lead to a weakening of the dollar. I note that forward rates on 2-year and 10-year government bonds are already falling. They are around 1.3%. Which tells me that maybe not in the short term, in the next 2-3 years the market can expect another dollar cut in interest rates.
Any idea/opinion on how the yield curve is playing out in the near term?
meszaros
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@wertzui, Yes. Stock market up, gold and other commodities up, bitcoin and other cryptocurrencies up, dollar down, Trump up :)
meszaros
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@wertzui, A dollar down means that the dollar may weaken.
EURUSD may turn north.
Captain_Walker
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Amazing analysis! I like it! If US Govt Bons crashes out we'd have global mayhem!
meszaros
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@Captain_Walker, If I look at the forward interest rates of the 3-month, 2-year, or 10-year yield curves, I read that in the medium term, another dollar cut is expected. Up to 0.8%. For the time being, the dollar continues to strengthen. But if you don't cheat on this chart (predicted quite accurately so far) then the dollar may be in a permanent turn. May start to weaken.