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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
US
- Investors’ sentiment on US Treasuries has been falling in recent weeks as market is expecting the inflationary pressures to remain elevated longer than previously anticipated.
- Chairman Powell told Congress on Tuesday that the Fed could hike more if inflation proves to be persistent in the coming months.
- We have seen that the implied probability for 4 Fed hikes this year has been gradually rising towards 80% in the past few weeks, levitating US LT bond yields.
- Interestingly, JPM US Treasury Sentiment Indicator has fallen to its lowest level since December 2017, implying that the ‘Short Treasury Trade’ is getting crowded (top chart).
- On the other hand, CFTC CoT shows that the net short interest on aggregate US Treasuries (2Y, 5Y and 10Y) is still standing far below its 2018 levels, when the combined short contracts nearly reached 2mil (total contracts stand at 637.8K, lower chart).
- US 10Y yield has been testing its 1.7870% resistance in the past few days, which corresponds to the 50% retracement of the 0.3140% – 3.2590% range (2018-2020 high low).
- A break above that level would open the door for a move up to the psychological 2% level (July 2019 highs).
Source: Bloomberg/CFTC/JPM/MNI
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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