Bond market update: momentum, drawdowns in context, corporate bonds, long-term rates expectations, intermarket indicators, macro, search for yield, and the cure for higher yields...
The Bonds Chartstorm is really helpful as the bonds market is experiencing the biggest pivot in market regime since 40 years. Unfortunately many charts make the fundamental mistake of comparing different regimes of falling and now rising yields. To better understand this market, anchoring has to be overcome and comparisons starting in the 40ies and 50ies are needed.
Thanks, I will take a look (the other problem is data availability). I guess the other point to ponder too would be that there is the third option (as opposed to bull vs bear trend): the push higher in rates could simply end up being a blip or the start of a new range trade
It feels like we have been sideways trading since I started trading. Been a bit too. I remember still paying a few dollars for my first trades. I read on a blog that the spread on the dow was 8 for someone. (Meaning they had to be 7 or 8 right to get paid one) when this gentleman started. It’s hard to imagine. I guess they direct us now (payment for order flow/no free lunch).
According to Powell, we can and we will withstand higher rates. He’s made it clear he won’t hesitate to hike rates until the economy slows down enough to keep inflation at 2%. However, I’m not sure we’re in for a soft landing.
The Bonds Chartstorm is really helpful as the bonds market is experiencing the biggest pivot in market regime since 40 years. Unfortunately many charts make the fundamental mistake of comparing different regimes of falling and now rising yields. To better understand this market, anchoring has to be overcome and comparisons starting in the 40ies and 50ies are needed.
Thanks, I will take a look (the other problem is data availability). I guess the other point to ponder too would be that there is the third option (as opposed to bull vs bear trend): the push higher in rates could simply end up being a blip or the start of a new range trade
It feels like we have been sideways trading since I started trading. Been a bit too. I remember still paying a few dollars for my first trades. I read on a blog that the spread on the dow was 8 for someone. (Meaning they had to be 7 or 8 right to get paid one) when this gentleman started. It’s hard to imagine. I guess they direct us now (payment for order flow/no free lunch).
According to Powell, we can and we will withstand higher rates. He’s made it clear he won’t hesitate to hike rates until the economy slows down enough to keep inflation at 2%. However, I’m not sure we’re in for a soft landing.
What you described (Powell assertion of higher for longer and commitment to crush inflation) sounds like a recipe for a hard landing...