Trade Alert

US bond yields more likely to break to the upside than downside

_{Posted by Club Member Sutton101 18.8.23}

We have a record amount of new US treasury issuance over the next few months, plus Fed doing QT, so markets will need to digest a ton of treasury supply being unloaded into the system

The US economy is hot, maybe too hot. The risk is that inflation reaccelerates, so the Fed will not be cutting rates anytime soon, and might even raise rates more, which will push bond yields higher

Chinese Yuan and Japanese Yen have been weakening against the dollar. PBOC already stepping in to support the CNY, maybe Bank of Japan will also soon follow suit to support the Yen? To support their currencies, both central banks will need to unload their US treasury holdings

Altogether, I think more likely to see increase selling pressures in US treasury market leading to higher yields across the curve.

So position your portfolio accordingly…

#Interest rates #Bond Yields #US Fed

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