Looking at the TVC:US10Y - TVC:US03MY and the AMEX:SPY it seems that during a recession like this TVC:US10Y - TVC:US03MY should rise and AMEX:SPY should fall.
Will it be the case this time as well or is this time different?
Maybe the FED cannot allow TVC:US10Y to rise this time due to the amount of debt and will instead impose yield curve control...
A measure of the Ted-spread using LIBOR based Eurodollar futures and 3 month US treasury bill rate.
Higher Ted-spread signals stress in the interbank market (shadow-market), and is not a healthy sign with regards to liquidty.
May of last year, I predicted 10-12 months before the inversion would match the time-frame of inversion and un-inversion seen back in 08. Obviously, the catalyst I did not predict, but the underlying fundamentals were there and 12 months later, we are yet to technically be in a recession. Keep in mind, we need 8 months of data to print for GDP until the quants and...
Hope this idea will inspire some of you !
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This chart gives the relationship between Yield Curve (10Year - 3Month treasury rates) Vs SPY. The yield curve is considered to be one of the predictors of recessions. Recent US recessions are also marked in the chart.
FRED:FEDFUNDS 01:37:23 (UTC)
Fri Jan 3, 2020
This is not financial advice. I am not a licensed financial advisor. Seek a licensed financial advisor before making any investment decisions. I am not responsible for losses or gains that may or may...
Although we primarily trade FX contracts, staying on top of the equity markets around the world can have huge advantages when trying to identify opportunities preparatory to them even showing validity. The CBOE Volatility Index , known by its ticker symbol VIX , is a popular measure of the stock market's expectation of volatility implied by S&P 500 index...
Over the coming weeks I will continue to post some of my (maybe controversial) 2020 predictions.
US Yield Curve (10y-3mo).
Next few weeks: up to +60bps
1q/2q pullback to maybe 0bps
Rest of 2020: rapid rise +200bps
The bar chart is the US10yr yield minus the US 3month yield. Over the last 30 years the spread has ranged regularly between roughly +375bps and negative 75bps. After hitting extremes it usually heads back very quickly in the opposite direction. Note the turning points from the lows (red lines). It looks to me like we are about to re-steepen sharply.
A clear pattern is showing -- at least for the two previous recessions -- when looking at the 3-month yield on monthly chart. The long stochastic has given strong indication twice before and is signaling imminent recession again. We'll see how it plays out, but I am more convinced than ever recession is very near and may have already begun.
The market has been tanking since the last Fed meeting, now Powell is hinting at another rate cut in Oct. The rate cut is already priced in now, and they're starting to price in another one for Dec or Jan.
I'm beginning to think that Trump wants rate cuts more than he wants a China trade deal since his businesses are all interest rate sensitive, and he's...
3 month yield is still below Fed rate which means the market is still anticipating a rate cut. It would be absolutely ridiculous for the Fed to cut rates when the economy is still growing. Retail sales were good, unemployment numbers are still at the bottom.
If the Fed doesn't cut rate or signal one for Oct, expect the market to tank.