It is common knowledge that interest rates play a major role in any economy, so I recently decided to sit down and see how the 10 year U.S. bond yield has acted during recessions in the past to see if it correlates somehow with today's markets. After all, the biggest component of any recession is monetary policy which would imply interest rates and therefore bond...
US 10 years yield is setting up for bounce off.
Its a longer term buy opportunity.
We are expecting this to bounce off and reverse the trend for longer term.
Watch bounce off and look for reversal.
This is an update to previous ideas charted at New Years 2019.
The 10 year yield has been following the path of lower yields in a lock step fashion, however the pace of declining yields is concerning. The 3 day looks like Niagara Falls
Where do we go from here?
Currently, the 10 yr yield is in the middle of the 1 (1.32%) and .786 (1.734%) retrenchment lines...
An inverted yield curve (2/10) is an indicator but the 'cause'. Yields were 6%/5%/4% last times they were inverted and not 1.5% :) If corps can't afford to pay 1.5%, there is nothing Fed can do to resolve that issue. Policy issues are the cause and the cure is fiscal and not monetary. GL
Not a trading call, just sharing my view. Peace
Here is a chart of quarterly PCE growth, which gives another useful 'recession watch' indicator. It is currently at a critical level and worth keeping a close eye on.
Commentary from "The Recession Playbook" from Morgan Stanley:
"With growth in real personal consumption expenditures (PCE) below 2.5% sending a reasonably consistent recession signal. Each of the...
The spread between Indonesia Bond 10Yr with US Treasury 10Yr reached the highest level since the end of 2016. The spread is now at 5.8% wherein the beginning of 2018, the spread is only at 3.6% and 5.4% at the beginning of 2019.
The latest increase of the spread (since Jul'19) is caused by the falling of UST 10Yr at high speed (from 2.1% to 1.5% in just a...