Jaw is getting bigger and bigger.
The bond market can be quite tricky. In terms of yield curves consider the following: Bear steepening Bull Steepening Bear Flattening Bull Flattening > Steepening (the premium for longer debt is growing) > Flattening (the premium is shrinking) For example, bull steepening, which is exactly what we have been doing this since the start of this...
📌 Endgame in the economic cycle and illustrating a painful recession Yields had the opportunity to move and successfully played the 'elastic band' rejection from the inversion in 2019, which despite the length of the global CB combination, can be expressed in no other terms than reckless. FED was obviously aiming for the ideal position (the frontal defence from...
The U.S. 10 Yr. Yield Jumped over 5.2 BP to +7% , following a full in prices post debate. This is the highest since sept 18th.
📌 Yields are clearly hesitant to subscribe to the V shapers in Global Equities. An important observation in an extraordinarily difficult trading environment. The 0.90% - 0.50% range is clearly defined and from time to time we have had to get involved with a gentle grin and attempt to play both sides. The 0.50% lows are 🔑 for this battlefield, as long as...
📍 This chart update comes from the ' Alpha Protocol - Seeking Immediate Extraction ' The cramped inversion should aways be considered the end game of an economic cycle. But of course we will get the v shapers and naysayers who obliges that stonks only go up. The space available to operate against the Robinhood army is becoming more flexible. Sharp speculators are...
What are real interest rates? The real interest rate is the rate of interest an investor, saver or lender receives after allowing for inflation. It can be described more formally by the Fisher equation, which states that the real interest rate is approximately the nominal interest rate minus the inflation rate. Now, two scenarios unfold. One, the gap in the...
Remember, the stock market isn't the economy. A healthy economy usually is correlated to a healthy stock-market (price valuations, liquidity) However, the reverse is not true. The stock market isn’t the economy. There are a lot of private businesses in the U.S. that don’t reflect in the stock market. The stock market is forward looking while economic data...
The graph above shows that the correlation between the breakeven inflation rate and oil prices is not limited to the steep decline that occurred in 2014. Indeed, the correlation between the two series over the entire period shown (January 2011 through March 2019) is 0.65. Prior to 2015, the two series appear to occasionally move together. The comovement was...
Gold (Inverted) vs. 10 Year Indexed
US10Yr (Inverted) vs. Gold 23:40:29 (UTC) Tue Aug 4, 2020
Tough week for the US Dollar.. Circular relationships are important.
This circular relationship is leaving many analysts puzzled as to what's next for the Dollar. Weight of the evidence points to a lower Dollar for now. A truly weak US Dollar means the clocks ticking on the current bull market in Bonds and subsequently the upward trend in equities.