Bonds have continued their decline as the markets price in a potentially historic FOMC rate hike this week. Inflation data suggests that the Fed's rate hike trajectory is not really working and inflation is still soaring. On the other hand, multiple indicators suggest that we are in a recession, and the Fed will have to pivot their hawkish stance after this last rate hike. If that is the case, then we expect the bond market to be nearing lows. We have one more technical level before we will have to start using inverse Fibonacci extension levels to predict lows in bonds again, as 113'12 is our last technical level. The Kovach OBV also appears to be leveling off. The next targets from above are 115'03 and 115'29.
Below are links to a rapid-throw-together set of charts comparing [interest, exchange] rates internationally. There are probably millions of other graphs like this created by [academic, policy, economic, corporate] organisations, far more advanced and accurate than mine. Even so, the graphs below show the time relationship between [exchange, interest] rates, and are suggestive of some degree of correlation. Not sense pushing this too far, it would be more fun to ferret out more of the network of inter-related factors. One possible current anomaly is the GBPUSD exchange rate?
The charts were generated using a simple PineScript (should be visible?) // saved graphs - unfortunately, all of the colored labels on the graph were lost!! // exchange rates are shown by darker colors, interest rates lighter similar colors // China - green, Euro - purple, Great Britain - blue, Japan - orange (you can see this in the4 code below!) /// stable interest rates : [JP10Y, CN10Y] // policy-manipulated interest rates : [TNX, EU10Y, GB10Y] // maybe the "stable rates" countries do more "exchange rate" manipulation?
I will try to publish the script, but I won't fight the system if it turns out to be a pain (again).
The charts were generated using a simple PineScript (should be visible?)
// saved graphs - unfortunately, all of the colored labels on the graph were lost!!
// exchange rates are shown by darker colors, interest rates lighter similar colors
// China - green, Euro - purple, Great Britain - blue, Japan - orange (you can see this in the4 code below!)
/// stable interest rates : [JP10Y, CN10Y]
// policy-manipulated interest rates : [TNX, EU10Y, GB10Y]
// maybe the "stable rates" countries do more "exchange rate" manipulation?
I will try to publish the script, but I won't fight the system if it turns out to be a pain (again).