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Government bonds

Observing Bearish Divergence in the 20-Year Bond MarketIn the world of finance and investing, keeping a watchful eye on market trends and indicators is essential for making informed decisions. Lately, I've been closely monitoring the 20-year bond market, and I've noticed some intriguing signals that could have far-reaching implications for the financial landscape. What caught my attention is the presence of a significant bearish divergence pattern on the daily chart. This divergence suggests a potential shift in market dynamics, which could have ripple effects throughout the financial sector. Bearish divergence occurs when an asset's price makes higher highs, while a key technical indicator, such as the Relative Strength Index (RSI), makes lower highs. In the case of the 20-year bond market, this divergence is becoming increasingly evident. This pattern typically suggests a weakening bullish trend and a potential reversal in the making. One of the intriguing aspects of this bearish divergence is its potential to put pressure on overleveraged banks. When the bond market shows signs of weakness, banks holding substantial positions in bonds can face increased risks. Overleveraging has been a concern in the financial industry, and a downturn in the bond market could be a catalyst for addressing this issue. However, here's where things get even more interesting. While the bearish divergence might suggest a market correction or even a bear market, I have a hunch that central banks might have a different playbook in mind. Instead of allowing a sharp market downturn, they could intervene with massive Quantitative Easing (QE) programs. Quantitative Easing is a monetary policy tool used by central banks to stimulate the economy by purchasing financial assets, typically government bonds. By injecting liquidity into the market, central banks aim to lower interest rates, encourage borrowing and spending, and provide support to the financial system during challenging times. In this scenario, central banks might use the bearish divergence as an opportunity to step in with substantial QE measures. By doing so, they could provide a safety net for the bond market, stabilize financial institutions, and prevent a market crash. However, there's another twist to consider. Before initiating massive QE, central banks might strategically "flush out" leverage from the market. This could involve allowing a controlled market decline to clear out excessive leverage and speculative positions. Once the market has undergone this cleansing process, central banks could then step in with their QE measures to support a healthier financial environment. In conclusion, the bearish divergence in the 20-year bond market is a noteworthy development that has the potential to impact various aspects of the financial sector. While it may indicate a weakening trend, it's essential to keep in mind that central banks often have tools at their disposal to mitigate the effects of market turbulence. Their actions in response to this divergence could be crucial in determining the market's direction in the coming months. As an investor, it's essential to stay informed, closely monitor market trends, and be prepared for various potential outcomes. The financial world is dynamic and ever-changing, and being adaptable to different scenarios is key to successful investment strategies.
TVC:US20Y
by lukedotcom
US10Y: Soaring Bond Yields as Federal Reserve Maintains Hawkish The Fed Hawkish Stance During Wednesday's address, Federal Reserve Chair Jerome Powell reinforced his stance on tackling inflation with a more cautious approach. He emphasized that the central bank is not yet finished with its efforts to curb inflation and hinted at the possibility of implementing multiple interest rate increases during future monetary policy meetings. Powell's statement comes as a response to the ongoing challenge of bringing down inflation, which has consistently remained above the central bank's target of 2%. Notably, some Fed officials have emphasized in recent speeches that inflationary pressures persist. They specifically highlight core inflation, which excludes the volatile prices of food and gas, as not decelerating as rapidly as overall inflation. The aforementioned statement supports the potential scenario of higher Government Bond Yields in the future, as an increase in interest rates typically correlates with elevated yields. Technical Analsyis The U.S. government's 10-Year Bond Yield has undergone a retracement, precisely at the 0.5 Fibonacci ratio, establishing a support area. Notably, the yield currently exhibits a bullish trend as it remains above the EMA 200 line, indicating positive market sentiment. Furthermore, the Falling wedge pattern suggests a continuation of the prevailing trend. Complementing this observation, the stochastic line crosses within the neutral area, further bolstering the case for a possible upward movement toward the target area. It is important to keep in mind that once the target/support area is reached, the roadmap provided may no longer be valid. If you find this analysis helpful, I encourage you to show your support by clicking the rocket button and sharing your opinions in the comments section below. "Disclaimer: This analysis is intended solely for educational purposes and should not be considered as a recommendation to take a long or short position on the TVC:US10Y ."
TVC:US10YLong
by financialfreedomgoals101
9
Have yields peaked?Even though stocks are higher because of this, don’t get too excited that US 30yr yields look like they have found resistance near term. From the looks of it, we have, at least until Friday when the Non Farm Payroll data is due for release. In the near term, the 5% level capped the rally with the 161% extension just above at 5.05%. The daily RSI was overbought and may need to correct before resuming higher. On Friday, if recent history repeats itself, the US jobs data may come in relatively strong (still) and keep rates elevated and planted firmly in the bullish trend we are seeing. Dips back towards the 4.69% level may be seen as buying opportunities.
TVC:US30YLong
by ForexAnalytixPipczar
US Government Bonds 2 YR Yield - Strong bearish divergenceOn the above 2-week chart the 2 year bond yield has increased an astonishing 4500% in a little over 2 years, perhaps you’ve noticed?. The chart is now indicating rising yields are a thing of the past, at least until 2026. From here on it is pauses and cuts until the real economy shows signs of recovery. This will likely be a difficult 2 years ahead for many. The bearish divergence is significant. Multiple oscillators now print bearish divergence with the rising yield as measured over a 10 month period. Look left. On this time frame with this many oscillators printing divergence, the yield corrected or appreciated significantly and with momentum. Astonishingly a majority of ideas in social media circles and even here on tradingview.com are calling for higher yields. Maybe; however the chart is saying something very different. Is it possible yields continue to increase? Sure. Is it probable? No. Ww
TVC:US02YShort
by without_worries
14
US02Y : The BOND dilemma The recent dot plot is quite interesting. It has 2 important notes: a) no recession b) you got to wait longer if you are looking for cuts. This caused yield to move UP - to price in a longer Fed pause. And I think both short and long yield to continue to be HIGH. In a situation with high DEBT load, a higher rate environment is trouble. $ FX and US yield sometimes move in unison and sometime not. We just need to know when it does and when it choose not to. We are now again at the point when things tilt. I THINK that when yield goes any higher, DXY would need to move LOWER to compensate for the higher rates. As we know, DXY is now facing some resistance on its way UP. In a week or two, US might face another possible government shutdown. We must trade with caution. Till the next dot plot in 12/2023, DXY might NOT move up as fast as earlier thought. Good luck.
TVC:US02YLong
by i_am_siew
5
Yield Curve Bottom (10s minus 2s) This is called the "Steepener" trade and refers to a mean reversion in the yield curve. From current level of (-38 basis points, or -0.38%), I'm targeting a move back to 1.00%, or ~70bp, risking down to about (-45bp), or about (-13bp) downside. Yield curve steepeners seek to gain from a greater spread between short- and long-term yields-to-maturity by combining a “long” short-dated bond position with a “short” long-dated bond position, while a flattener involves sale of short-term bonds and purchase of long-term bonds. - CFA Institute
TVC:US10YLong
by jBTCkingaling
1
US 10Y : "FED vs MARKETS" |...who will win? | (Part.II)The market is waiting for one of the most important events that could give a clear direction for the coming months. Today FOMC will release interest rate decision and the main players ( TVC:DXY , TVC:GOLD , VANTAGE:SP500 and FX:EURUSD ) will suffer the consequences. Even if we cannot rule out a 25bp increase, most analysts believe that a pause may be the right choice, also because the usual press conference is not scheduled for the next FOMC meeting, so the board could take advantage of this opportunity, to explain this "temporary change in direction" to the market. So, what will happen today? No I have an objective answer to this question, unfortunately I am not a guru but a simple Trader, so today we will limit ourselves to following events. Having said that, from a technical point of view, we were lucky in March because we widely predicted this increase in yield rates from 3.30% area to a new high (wave 5 for Elliottians) in Part. I of this Analysis. On weekly chart the trend is bullish and the next technical levels are around 4.46%, 4.61% and 4.7%, but today TVC:US10Y could take any direction. US 10Y : "FED vs MARKETS" |...who will win? | (Part.I) (Click on chart below) Trade with care Like | Share | Comment
TVC:US10Y
by TheAnonymousBanker
9