Pandorra Updated   
TVC:US10Y   US Government Bonds 10 YR Yield
Bank of America says the recession and credit crunch could lead to large corporate defaults.

Credit strategists at Bank of America note that the fallout from the recession and credit crunch could see $1 trillion in corporate debt eventually become insolvent.

This is largely due to the fact that banks have already begun to refuse lending conditions after the collapse of Silicon Valley Bank. US debt growth has also slowed in recent years, and a "full blown" recession has yet to be officially declared.

If a full-blown recession does not occur in the next year or two, the restart of the credit cycle will be delayed. For now, analysts still predict that a moderate/short recession is more likely than a full blown recession.

Markets are increasingly nervous about the prospect of a future downturn, with the New York Fed's Recession Probability Index projecting appr. 70 percent chance of a recession hitting by April 2024. The risk comes from the Fed's aggressive 21-fold increase in interest rates over the past 15 months to tame inflation.

The US Federal Reserve, having fired a lot of "HIKE RATE" ammos over the past two years. And certainly has fulfilled its goals.
In fact, in the second quarter of 2023, the rolling 12-month growth rate of the Consumer Price Index (April value = 4.9%) was below the Core CPI (April value = 5.5%).
In human words that means prices of food and energy are deflating year-over-year.

To some extent, the risk is also heightened by the recent banking turmoil, as lenders suffer losses on their "HELD-TO-MATURITY" (and in fact "READY-TO-SELL") portfolios of long-term corporate bonds and US Government bonds, as well as in due to a sharp outflow of deposits.

The technical picture in TNX says the key trend is still strong, thanks to tailwinds from the first quarter of 2022 and support of Weekly SMA(52).

The second half of 2023 is off to an interesting start.

High quality "AAA" 10-year Bond' yield is back to pain levels corresponding to the collapse of the FTX cryptocurrency exchange last fall, as well as the collapse of regional and cryptocurrency banks as early as this spring, 2023 (like SVB, FRC and others).

At the same time, real (that is, minus inflation) rates are now certainly much higher, against each of those two marks, as inflation is down.

Trade active:
July, 6, 2023

TNX is heading 🆙
Robusting surge above 4pct, first time since the Silicon valley bank has collapsed earlier this year. 👍

Trade active:
July 6, 2023

REAL 10YRS TREASURY BOND RATES (inflation indexed, EOD data).


Trade active:
August 1, 2023


Trade active:
Aug 2, 2023

Pushin' down on me,
Pressin' down on you,
No man ask for...

Trade active:
Aug 3, 2023

TNX still goes crazy, and is almost back to 15-years high at 4.20% level.

Technically, there are some considerations:
👉 Watchin' at 5.25-5.50 range that is corresponds to Federal Reserve rate.
👉 The biggest target is Double-digit numbers, that were not seen over last 40 years.

Monthly graph
Trade active:
Aug 15, 2023

👍 The US debt market is collapsing, and the yield on 10-year government bonds reaches 52W - highs.
👍 We continue to monitor the target range of 5.25 - 5.50, which is currently in line with the Fed rate.

Trade active:
Sept 22, 2023

👉 The bubble in American stocks and bonds is increasingly collapsing, and bond yields have risen after the Fed September meeting.
👉 The 10-year US Treasury yield jumped to a high of 4.50%, the highest level since October 2007.
👉 A potential U.S. Govt. shutdown may also be imminent as the House of Representatives went into recess after failing to pass a funding bill, dampening hopes for an overall budget agreement that would allow the government to remain open.
👉 A potential shutdown could occur as early as October.

Trade active:
Sept 28, 2023

👉 ̶U̶̶̶.̶̶̶S̶̶̶.̶̶̶ ̶̶̶G̶̶̶o̶̶̶v̶̶̶e̶r̶n̶m̶e̶n̶t̶ ̶̶̶s̶̶̶u̶̶̶c̶̶̶k̶̶̶s̶̶̶ ̶ Everything Is Under Full Control.
👉 TNX Rockets to Stratosphere.
👉 Short Term 1-3 Months T-Bills is the way only.
👉 CME Group is intended to launch the U.S. Treasury Bill (T-Bill) futures on October 2, amid record demand for CME Group U.S. Treasury futures.
👉 Adding to the CME Group short-term interest rate (STIR) product portfolio (T-Bill futures) will be cash-settled and based on the 13-week U.S. Treasury Bill auction discount yield.

Trade active:
Sept 28, 2023

👍 US10Y is at 4.690 as of today. Day after day TNX prints new highs.
👍 The nearest target is still the same, 5.250 - 5.500 range that corresponds with Federal funds rate.

Trade active:
Oct 2, 2023

Bulls Party That Never Ends..
T-Note yield US10Y just hit new 2.700 high 🥳

Oct 2, 2023

Sorry sorry
4.700 high , of course 🥳🥳🥳
Trade active:
Oct 5, 2023

👍 US10Y hit 4.800 level. Day after day TNX prints new highs.
👍 This is all because no one trust in America any further.
👍 The nearest target is still the same, 5.250 - 5.500 range that corresponds with Federal funds rate.

Oct 18, 2023

👉 US10Y hit 4.900 level.
👉 Target is still the same, 5.250 - 5.500 range that corresponds with Federal funds rate USINTR .

Oct 19, 2023

💡 Some interesting observations on Federal Reserve monetary policy, in connection with TNX trajectory, over the past 50 years.

👉 Over the past 50 years, rate hiking cycles have typically ended, where TNX (10yrs yield) and FF rate meet together, check the chart below.
👉 But there were several exceptions, specifically in 1970s - early 1980s, where Federal Reserve has been in similar fight against extreme high inflation.
👉 In the same manner Federal Reserve DID NOT STOP monetary policy tightening earlier in Q4'22 where TNX and FF rate meet each other. So.. by this way.. at the end of Q3'23 FF Rate was 5.500% (!), where TNX Rate was 4.570% (!)
👉 Once again, check the chart below to realize how Federal Reserve was doing it's job almost 40-50 years ago.
👉 It is also important is how the US stock market behaved in both previous noted cases (minus 50% in mid-1970s, and almost minus 30% in early 1980s).

Order cancelled:
US T Bond yield Has finally reversed. Fed Reserve Goes Dovish (is short future).

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