BOJ No Show & Bonds Bid
Equities Gold reverse course
A Record breaking bid to cover in the US Govt 20Y auction today sent yields lower as earlier price action was taking a breather from the BOJ no show this morning. Yields were sharply lower then bid back up post NY equities open and then the auction came with decent support.
The 20Y $12BN Auction saw a high yield of 3.678% down about 25bp from last month and came with a massive 2.7bps stop through. The bid to cover was a hefty 2.83, the highest on record.
So when we hear “Don’t fight the FED” we laugh because its been obvious to us since October that the Global bond market and their massive flattening and inversions where real investors with real risk have to hedge their books. For months they have and continue to tell us that global central banks are wrong, dead wrong. We know they are wrong, the global bond players know they are wrong and they themselves at the FED will throw in the towel here soon.
The US Govt 30 Year is now down some 45 basis points to start the year and down from their October peak of 4.43%, down a whopping 89 basis points:
So next time you hear your esteemed colleagues talk about never fighting the FED, you can tell them trillions of dollars by real risk players is no match for any global central bank and their capital and fiduciary constraints. That precipice was passed long ago and balance sheets at the central bank level are the problem, once they got too big, the global market and their outside capital absolutely have a more direct impact than they do and a $8T plus pig of a FOMC balance sheet means, they increasingly become more impotent to global forces.
Here is further evidence of just how wrong the bond players are saying the FOMC is on their Fed Funds rate. They are saying a massive slowdown is coming and are betting heavily against these dreadful mistakes by the FOMC as the next hike, (if they even do it) will see this spread widen to 130 basis points:
Equities have reversed earlier gains as well hitting, testing and rejecting the 0.618 Fib which is always formidable. We will respect both the top of this trendline as well as the 0.618 and would suspect the 3935 area, 0.382 to provide technical support.
Speaking of 0.618 fib technicals, the gold bulls have to contend with this force now as well. Technically a close back below would signal a short term sale and top formation. This is just a technical set up, we view fundamentals in the complex very strong. The global revaluation is underway and we all know this is a long time coming:
We also hear whispers of some DOJ global cryptocurrency action, kinda funny as you can’t really control something you can’t define, can’t really pin down, or simply don’t understand. What they do understand is that a P2P technology eliminates their stranglehold on monetary mechanisms and their fiat printing presses. Their product is debt and debt is not the future, that we are certain. These actions are there to circumvent a movement they know threatens the very existence of a monetary control mechanism and we will suspect continued pressure to ban, remove and subvert. will remain indefinitely.
All of those intentions will fail and the people should honestly demand more compliance from these governments whose only intentions are there to manipulate and control. The Bitcoin Technology removes this power and that is the real threat! In a digital age, there is zero use for their debt product in our opinion, the future is purely digital P2P, Trustless, Immutable and it will usher in a knew altruistic age one dedicated to truth and peace, something the ancients most likely understood, but we have long forgotten.
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