Why is the USD gaining some strength? Why are metals being hit and breaking their bullish trends? Probably because rates want to go higher from here. In terms of ZN futures it obviously means lower price.
Clearly US rate expectations and bond curve movements lead global Fixed Income markets. Any big QE the other central banks can promise, if US yields go up, global yields can not really go down. (one reason among all, that supports my bearish view on Bund and BTP).
There can be one more important consequence of rising yields: global risk asset repricing. If we call global bond markets a bubble, whyt will happen to EM world and developed stock markets if yields really go up. By this I don1t mean 5-10-20 bps surge... more like 75-150 bps bond blow ups on mid and long end of the bond curves. Just thinking laud.
My view is the same as it has been for months: the huge and historically unprecedented bubble is in the bond markets! Therefor first short the bond markets, and only later can we get bearish for stocks.
ZN Technicals: All bearish, or bearish-like signals are marked on the weekly and daily charts with ellipses. Possible bearish tgt is 129+
Comments
Kumowizard
⋅
Bearish. But BTP is still the best short!
fash
⋅
Excellent stuff Kumo, love your analysis, especially with things that aren't on my radar. Thanks again!
Kumowizard
⋅
welcome friend!
You don't have to put too many things on your radar, but ZN is something you should follow. It is a basic element of the global capital market. Very important to know what is happening in rates, especially in US bonds!
By the way you can trade the whole global macro with maximum 10-15 assets. Something will always catch a trend.
pmcllc
⋅
not sure but treasuries might break out higher...
Kumowizard
⋅
for me right now price action looks the opposite ... I mean if we both talk about price.
Selling pressure, bearish signals