After chopping around in a descending triangle pattern for the past 2-months, the 5-Year Yield is pushing back towards all-time lows below 0.30% $FVX
If the recent price action in Financials, particularly the Banks are any indication, prices are likely to resolve lower. Stocks will likely remain under pressure in that environment. XLF KBE
I've been looking around for various data tools to indicate recessions catalysts and their relationships to financial indicators over the past few months. From those efforts, I've honed in on a particularly interesting ratio that seems to indicate financial shocks that spark recessions (indicated with green shading). It looks like when you take the Fed's Interest...
Money gravitates to where it is treated best. Currently the mid area of the US interest rate curve is inverted.
90 day US T -Bill rate = 2.29% (IRX)
Five Year US T-Note rate = 1.92% (FVX)
Ten Year US T-Note rate = 2.14 (TNX)
Thirty Year US T-Bond rate = 2.58% (TYX)
While mid and long rates have plunged, short term rates have had only a shallow decline. Notice...
FVX Longer Term Outlook for Rates
Since Yellen retired in February FVX has risen to test the the junction of the upper parallel at the same point in time as it hit the fixed resistance line at 29.83. Since then it's been consolidating inside a slowly forming pennant formation with a spike down to the 25.46 line almost exactly before it pushed higher again.
Watch this immense gap between the 5 y treasuries and the thirty years bonds. It will close sooner or later and I don´t expect the 5-y to fall or not far enough to close it.
We´ll see probably a fast rise of yields in the 30- y bonds and this will cause much losses to the investors who are not aware of this.
Sure, the indicators are signalling a correction in the...
the course of the 5 years treasuries have rosen from 1.62$ to 2.60$.
Even if the market expectations for higher interest rates are still active we can see a little consolidation on this level - which is the fib retracement 100.
After the consolidation in this flag pattern we can expect a continuation of the rise to prices around 2.90$ (fib extension 1,272%).