40 days ago

Which is most attractive #stocks or #bonds? #trading #investing $QQQ #TLT #SPY

Investors are now able to buy risk-free US government bonds (Treasuries) to achieve a yield of around 4.3% (2-year US Treasury yield). Compared with the S&P 500 which offers a dividend yield of around 1.7%, investors find it more attractive to increase their bond exposure. Similarly, institutional investors or other sophisticated investors may use leverage to juice up returns using bond risk exposure instead of equity. And precisely that, could continue to pressure equities lower as investors rebalance their portfolio out of equities and into bonds. 

#Stocks #Bonds

113 days ago

Treasury #Yields - what's next? #stocks #bonds $TLT

US Treasury yields have surpassed the 4% mark across the curve including the 10 and 30 year, worrying investors of the effect of higher rates. But not only investors are worried, as demand dried up. Treasury secretary Janet Yellen said she is worried about the lack of liquidity and that the Fed's standing repo facility could help. Momentum is also building for creating a Treasury bond buyback program, in order to provide more liquidity to the Treasury market. As opposed to quantitative easing where the Fed buys bonds, here it would simply be the issuer (the Treasury) buying back some of its bonds. In the meantime, stronger-than-expected earnings are helping lift market sentiment, despites Treasury yields holding firm near 4%.   


240 days ago

10-year Treasury #yields revisiting 2018 highs #stocks #markets #inflation #Fed

US 10-year yields are revisiting highs from late 2018, as money markets are pricing 75 basis points by the Fed's September decision, implying two 50 bps and one 75 bps rate hike, according to interest rate swaps tied to FOMC policy outcome dates. More worrying the US 2 and 10-year yields are close to inversion as the 2-year yield is close to 3.2% and 10 year is at 3.25%.

#Stocks #Bonds

278 days ago

EURUSD jumps upon Villeroy's remarks #europe #fx #trading

European Central Bank Governing Council member Francois Villeroy de Galhau said the conditions are met for interest rates to be raised back above zero by the end of this year if the euro-zone economy doesn’t suffer another setback. Money markets are pricing in a 25-point increase in July and raised bets on the pace of tightening beyond that, seeing 95 basis points by year-end. German two-year bond yields hit 0.35% following Villeroy's comments and the euro jumped against the dollar.

#Bonds #Forex

286 days ago

US GDP softer than expected #stocks #growthissues #trading

The US economy unexpectedly contracted in the first quarter, dragged down by softer inventory growth, a persistent trade deficit, and to some extent by softer consumer spending. Gross domestic product fell at a 1.4% annualised rate (vs +1.1% expectations). Many analysts consider the print "misleading" as they state that the economy is still quite strong. But should coming economic data point to a softer growth, this could push the Fed to reconsider its monetary stance.

#Stocks #Bonds