Short 10-yr US T-bond Futures (From 14-May to 16 May)
Real-Time AmpGFX – Bought 10-year US T-Bond futures to close short on Italian political news (Wed 5/16/2018 6:58 AM MT)
Bought half unit TYM8 at 118-24.5
The radical proposals by the new leaders trying to form a government in Italy threaten returning a safe haven bid for US Treasuries.
I am closing the short for the time-being to reassess
Positions
Long half unit AUD/NZD at 1.0680; s/l 1.0843
Real-Time AmpGFX – new orders for AUD/NZD & US bonds, and thoughts on these trades (Tue 5/15/2018 1:21 PM MT)
….
The US 10 year yield has broken to a new high, and we are giving this more space to develop, but moving our stop loss in the futures down to near our entry, which is essentially just below 3% yield. We are looking for yields to establish themselves in a 3% to 3.25% range (if not higher).
Positions
Long half unit AUD/NZD at 1.0680; s/l 1.0843
Short half unit TYM8 at 119-07; s/l 119-07+
Real-Time AmpGFX – sold 10-year US Treasury Note futures (Mon 5/14/2018 8:43 AM MT)
Sold half unit TYM8 at 119-07
Comment
Bond yields globally and especially in the US have retained a rising trend this year, resilient to upheaval in the equity market.
In fact, the upheaval in the equity market in part is driven by the rising trend in yields; and the latter appears to be in the driving seat. We expect yields to continue to rise keeping a lid on equities for the foreseeable future.
US yields have been consolidating after breaching 3%; we see the risk rising of another break higher soon.
US yields have only largely tracked sideways as US wage and CPI data in the last month were both lower than expected. However, the risks continue to build for wages to rise faster in the US (and globally) as the labour market appears to tighten further.
Oil prices continue to rise generating higher inflation expectations.
Trade war concerns have undermined equities over recent months. This continues to be a risk. However negotiations may be protracted, and in the mean-time trade and global growth may be little affected.
Trump has made overtures towards China on potentially allowing ZTE to continue trading in the US, and may reveal a less aggressive approach on trade towards China.
Q1 growth data were held back in the US and Europe due to weather disruptions, we may see stronger data in coming months
Positions
Long half unit AUD/NZD at 1.0680; s/l 1.0813 (raised from 1.0767); t/p 1.0998
Short half unit TYM8 at 119-07; s/l 120-02+