What the hell is going on in the bond market?

Discussion in 'Financial Futures' started by RGLD, Aug 28, 2019.

  1. RGLD


    The 1 month yield is higher than 30 years??!! What?!?



    I did notice the volume of the 30 year is high but the front months are low... Whoever is pumping up bond prices are only interested in the later months...

    Also as a side question, how much money does a bond literally pay? like in dollar terms for every 1,000 USD invested?
  2. bone

    bone ET Sponsor

    Central Banks are now openly in the Dollar Peg business by aggressively cutting rates AHEAD of the USFed.

    Powell and the Fed are being forced into a negative interest rate scenario because the ECB is already there. Draghi has made it clear that he wants to continue cutting further into negative territory and the Bank and Currency Desks take this as the EU’s strategy to depreciate the Euro vs the Dollar as a means to compete.

    So US Yields are headed further down because quite frankly the US is playing catch-up.

    Draghi isn't done and Powell just got started. Even New Zealand cut 50 basis points.
    jys78 and murray t turtle like this.
  3. Sig


    You buy the bond at a discount to face value and get face value when it matures. The rate is determined by the discount to face and the time to maturity.
    murray t turtle and ET180 like this.
  4. tsznecki


    Wow we are setting the bar low today. Elitetrader.com? More like Amateurtradersneedinghelp.com
  5. RGLD


    Wait, why? Why's the trend to cut-rates all of a sudden? Last year fed was rising rates and pretty dedicated about it.
  6. 'Cause Trump threw a fit!
    Overnight likes this.
  7. %% That;
    +seems like people are rethinking loaning US gov, money.One substandard, below average fund manager rejoiced on radio;US does not have negative rates like Europe.Glad to hear that [sarcasm/LOL]............................................................
  8. bone

    bone ET Sponsor

    Look at the Dollar Index long term - past five years. That’s what happens when the US is raising rates and the rest of the world is either cutting rates into negative territory - or in the case of China just outright using a Government Currency Desk to peg the Yuan to the Dollar.

    And btw - the German Schatz (2 Year) is yielding -0.89%. :vomit:

    The US exported $5.6T in goods last year - just behind China then the EU. And when the Euro depreciates 10% versus the Dollar over a period of several months in 2018 RAISING INTEREST RATES SLOWS EXPORTS. In other words, if the Fed’s raising rates and the rest of the G-7 is aggressively lowering rates - the Fed could possibly bring on a recession at worst or at the very least cut US exports by hundreds of billions per year.
    Last edited: Aug 28, 2019
  9. RGLD



    Will this do? You talking about 2014 and up? Trump looking for allies against China right? If we devalue our currencies together ( japan's already there.. ) it'll hurt their export business...
  10. maxinger


    Simply stop complaining and just trade bonds.
    Don't need to understand why this is so high and that is so low.
    It wouldn't help us earn $$$.
    Just focus on the charts.

    Lately Long term Bonds are extremely good for day trading.
    You can earn tons of money even if you trade with just one lot.
    #10     Aug 28, 2019
    jys78, RDK91 and bone like this.