this is why im not sure the bond mkt breaks its trend before next year. certainly they will sell rallies bvut 2.38 shud hold on wkly/monthly closing basis. if not then u have to go with the break.
Paris ib 14:18:20 GMT - 11/15/2016
nh I think it all depends on how things develop from here. I'm taking the view that we will really know only after January 20th. For now we have market uncertainty, a bit of panic and a market which is overwhelmingly on the same side of the trade. This should not really have been allowed to happen but we have all the crazies in charge of Central Banks around the world so it did happen. The bond market still has the potential to explode.
Livingston nh 14:15:13 GMT - 11/15/2016
ib - it would be a problem if rates were rising and the USD was weakening - check rate levels last year before the Fed hiked -- this isn't any different yet
LONDON SFH 14:10:27 GMT - 11/15/2016
The volatility is somewhat scary when caught up in it I have to say...we can compare it to 1994 when the surprise Fed hike unravelled bond mkts....the Buba kept on easing and German curves steepened massively...I think for different reasons we have a similar situation here
14:10:01 Showing my age now
Paris ib 14:09:56 GMT - 11/15/2016
nh yes sir. The market was out of sync with reality and negative yields are a bad joke. The question is: how big is that exit door and who is holding the bid apart from the FED?
Livingston nh 14:08:19 GMT - 11/15/2016
There is a general sell-off in gov bonds -- even JGBs are out of neg yield // there is a shortage of USD in many countries so they have to sell off treasurys to raise cash so it becomes a rate cycle -- EM is looking at inflation as USD runs higher
Treasurys have been much too expensive (the deflation myth) so the market is adjusting to current reality
Paris ib 14:07:55 GMT - 11/15/2016
SFH agree... and we are going into year end and thin trading conditions. Personally - and I admit it - I haven't the stomach for this.
LONDON SFH 14:06:35 GMT - 11/15/2016
ib....Totally agree...very early days....I don't feel the Chinese have reacted at all yet but whilst their gunpowder is dry it is without a doubt ample and Trump will need to treat carefully in his dealings with them...We still have some retracing to do in order to get USTs anywhere near a reasonable valuation...if we get overshoots then it can really hit levels not seen in decades
Paris ib 14:03:10 GMT - 11/15/2016
SFH you also have the Chinese out there with a huge stash of Treasuries and the FED holding the fort. A lot is at play here. And seriously if we have a big turning point then the economic and financial landscape which we will have in a few years could be very different from what we have now. But it's early days...
london red 14:00:59 GMT - 11/15/2016
sfh its the usjgb spread thats initially driven the move on expectation of fiscal spending >> inflation. whether we get it is to be seen but mkt prices in in advance as always and if dont get it it will flip other way.
Paris ib 14:00:21 GMT - 11/15/2016
red... brave new world or not? We shall soon see. If it is this is like one very big, very important turning point.
london red 13:58:44 GMT - 11/15/2016
we have had a huge move in bonds. if its going to stay within longterm downtrend it will reverse shortly. we may have seen the high on yields already (2.30% on the 10). but if we break 235-238 we go to 270 and maybe 3% this year, an even bigger move than on trump. so imp not to get carried away after such a big move already.
LONDON SFH 13:57:10 GMT - 11/15/2016
I think the JPY move is partly behind it but I am not sure if the Japanese are actually selling or just not buying as much yet....if they were to actively sell I think the selloff would be more pronounced
Bali Sja 13:55:22 GMT - 11/15/2016
You just have to buy usd on dips everyday. Nothing can derail that until year end
LONDON SFH 13:52:38 GMT - 11/15/2016
I think the USD is reacting to other forces but agree the UST selloff is more of an exodus..tho a small trickle so far....
london red 13:52:18 GMT - 11/15/2016
only yen seeing new low but most reflective of em
Paris ib 13:50:05 GMT - 11/15/2016
U.S. bonds still getting sold off... FWIW
I remain of the view that this selling is NOT necessarily in fact is probably NOT USD positive once you get out of the short term time frame.
What we have is exodus. Explain to me why THAT is positive USD.
Short term... the market does what the market does.
Tallinn viies 13:47:36 GMT - 11/15/2016
US bonds squeeze is most likely over. so think it is time to try long euro again. bought at 1,0737 with stop at 1,0687. target 1,0800
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