The 10y-2y bond yields are important because it is the long-short of market expectations; that is, how people view the near-term market vs. their perceived evolution of the market (that also anticipates the FOMC's likely reaction. It's several signals in one). The 10y2ys (blue) is the 10 year Treasury constant maturity (now at 0.96%) Minus the 2-Year Treasury...
Forecast for Macro:
- Falling Wedge Breakout must be re-tested.
- Bear Flattener coming as short-term rates rise with Fed tightening expectations:
- 2x ATR spike in US02Y:
- The Fed members will probably all have their turn to make comments, leaning hawkish. This should cause a rally in the US02Y.
- Bonds Volatility...
According to FedWatch Tool www.cmegroup.com there will be 2 or even 3 interest rate CUTS in late 2020.
It means the difference between US10-US02Y spread will move up - arrow on the plot. We can already see that values jumped to 1.63 and that will continue!
The vertical dashed lines indicate the official...
The 10y-2y bond yields are important to visual the long and short term expectations of the market. Usually, when the 10y-2y go negative it signals a reversal for the stock market. As you can see, yields (top) are inversely correlated to the S&P (bottom). Yields bottomed and turned around with the Covid crash but the stock market continued to rally.
Is this time...
The bond market can be quite tricky.
In terms of yield curves consider the following:
> 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...
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In order to inform ourselves about the dangers of this move, we shall in what follows point to a few live charts which we called live together from 2019 that the 2s5s was going to invert frantically , and was a bad sign. It enables occupation of the dominos, which for those following long enough will know the one thing...
This is a Weekly Chart of the US10Y yield minus the US02Y yield. (This composite is sometimes referred to as the Yield Curve and if the spread or difference goes below 0.000, then that phenomena is termed to as Yield Curve Inversion).
This spread is widely followed worldwide as any number below or close to 0 tends to indicate impending slowdown in the US Economy,...
On the back of today's inflation data, expectations for higher interest may have accelerated, countering the US Federal Reserve's lower for longer stance while also flying in the face of lower than expected unemployment figures for last week Friday.
Above is an update on a key chart from our 20-February research report which shows the US 10 year - US 2 Year...
TIMEFIBS ARE BASED ON US10Y-US02Y CYCLE
The chart tends to move in a type of a sine curve.
Upside and downside moves usually closely follow the growth cycle of the US economy.
Curve steepening signals about incoming recession.
But this time spread is moving higher for a different reason considering recent overall economic outlook.
In Q2 we've just...