The US curve narrative: we are slowly moving away from the potential inversion that pre cursored GFC in 2008. The 10 year has finally got a grip as it punches through 2.7% and the expectation for the belly is higher. So USD follow ? Not so fast – deferential traders are still in pain. And it hurts. Two things to keep in mind: 30 year has nudged a little up at 3% BUT the spread between 2s and 10s is still rubbish as it flirts to .6% – 1.5% being the post GFC “normal” what ever that means. QT IS or IS NOT the cause. I don’t know, or care right now. It is FAR too early to say. Equity flows continue to take over yield hungry carry trades – in my book anyway. I see nothing changing but trouble ahead. The Wolf cites mortgage problems ahead and i concur. So the big question is do i see USD higher or lower? Please don’t get annoyed but i see it a bit higher then much lower as 2018 wraps. LOL
Philosophy: "Define your risk, only then can you ignore it"
Read how Patrick got into trading here
- How to trade: A LEVEL - August 4, 2018
- USD mixed – a bit like me - June 5, 2018
- What is the market focused on ? Over to you trader. - May 29, 2018