Bonds 06 (Oct 23 - Dec 26)

[behappyalways]

Why does Buffett buy short-term bonds?

24.08.13【豐富│東南西北龍鳳配】Pt.2 巴菲特為什麼大買短期債券？

https://m.youtube.com/watch?v=EvjjjOzsjZo

[behappyalways]

Arbitrage by the central bank is dead.
China's "public debt" has become the new focus of the market?!
The Federal Reserve issued a sub-question, but U.S. debt is hovering at the bottom?

日央套利已死 中國"公債"成市場新焦?! 聯準會送分題 美債卻在底部盤旋?｜20240831｜‪‪‪‪@inewsplus‬

https://m.youtube.com/watch?v=dWxhDYvAXTY

[winston]

Bond rally turns ‘dangerous to chase’ with bets on big rate cuts

By Ye Xie

The advance over the last four months marked the longest winning streak since 2021.

The move has been driven by anticipation that the central bank will reduce its benchmark rate by more than two full percentage points over the next 12 months, which would be the steepest drop outside of an economic downturn since the 1980s.

If you missed the big rally, it’s going to be a little dangerous to chase it now.

“We are playing with the probability of the job market stabilizing here or deteriorating fast. That’s the debate for the rest of the year.”

As a result, some investors and strategists are inclined to fade the bond rally. Deutsche Bank’s strategists recommended their clients selling 10-year Treasuries on Aug 26, targeting a move higher in the yield to 4.1%.

“We think the market is pricing in too much, too soon”.

“We still view the soft landing as the likely outcome. We would add interest-rate risks here, but wait for better levels.”

Source: Bloomberg

https://theedgemalaysia.com/node/725436

[behappyalways]

Time to rotate into fixed income?
https://x.com/Mayhem4Markets/status/1845857384645722603

[behappyalways]

Agreed term premia also rising....
https://x.com/crossbordercap/status/1848774485215985927

[behappyalways]

UK Gilt Yields Soar After Reeves Reveals Budget: Market Braces For Inflationary Debt Surge
https://www.zerohedge.com/markets/uk-gi ... debt-surge

[winston]

Today is the Perfect Day to Buy Bonds

by Marc Lichtenfeld

A stock is worth only what someone is willing to pay for it at a given time.

A bond is worth $1,000 at maturity regardless of what anyone is willing to pay for it at any time.

When you can earn more than 5% risk-free in the short term in Treasurys, more than 6% in safe corporate bonds or even 9% in more speculative bonds and get your money back, you have to ask yourself whether it’s worth it to risk your cash in stocks, which historically average a return of 8% to 10% per year but involve much more volatility.

Source: Wealthy Retirement

https://dailytradealert.com/2024/11/15/ ... e_vignette

[winston]

This Market Is Setting Up for a Bounce

by Jeff Clark

Notice that as TLT has fallen to slightly lower lows, all of the momentum indicators at the bottom of the chart have been making slightly higher lows.

This is the sort of positive divergence that was in place last April, just before TLT hit bottom and began to rally. And, it’s the sort of positive divergence that had us looking for a bounce two weeks ago.

The two-month decline in Treasury Bonds has been wicked. TLT is down 10% since mid-September. That’s a big drop for a supposedly “safe” asset like a T-Bond ETF. Now though, the chart is showing signs that the decline is nearing an end, and a rally could get started any day.

It looks to me like TLT is forming the same sort of bottoming pattern it formed in April.

If that plays out, then the Treasury bond ETF could be trading sharply higher in the days ahead.

Source: Jeff Clark Trader

https://tradesoftheday.com/2024/11/18/t ... -a-bounce/

[winston]

Keep bond duration short; rates may remain higher for longer

With the US labour market as well as core inflation remaining resilient, the Fed may not cut interest rates as widely expected

by Cyrus Ng

Source: Business Times

https://www.businesstimes.com.sg/wealth ... her-longer

[winston]

A ‘Yellow Light’ From the Bond Market

by Brett Eversole

Spread is the difference between what bondholders charge for risky bonds versus safe ones.

Today, that spread is the smallest it has been in more than a decade. That’s a serious “yellow light” for the market. And eventually, it will end badly. But as I’ll share today, that doesn’t mean it’ll end soon.

The “red light” for investors is when spreads rise quickly. When spreads begin to soar, something bad is happening in the economy. And that means pain is likely on the way for investors.

We’re not there yet. Spreads are low and still falling. That won’t last forever. But history says it could still be years before this low spread goes from a yellow light to a red light.

Source: DailyWealth.com

https://dailytradealert.com/2024/11/27/ ... nd-market/