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US 10 years bonds fall sharply with a scary way to start H2

US 10 years bonds fall sharply with a scary way to start H2

US 10 years bonds fall sharply with a scary way to start H2

in Weekly Market Brief

The second half of 2021 started with a relentless bid into bonds. Tuesday’s volume showed nearly double the normal volume into US 10 year bonds and the reason was far from clear. Are bonds being bought on variant concerns? Is the Fed’s latest shift to bond tapering considered to be too early? Is it just foreign demand for bonds and a rotation out of equities which have enjoyed a really good first half of the year? Whatever the reason the message for investors is clear, ‘watch out for the unexpected in the second half of 2021!’

Other key events from the past week

  • AUD: RBA interest rate decision, July 06: The RBA were optimistic this week and said that wage data would be very important going forward. The RBA had rising wages as a prerequisite for rising interest rates! Watch labour data closely!
  • Bitcoin: Still holding $30,000, July 07: As long as the $30,000 key level holds we can expect an accumulation of buy orders. If $30,000 does break then the next major supports sits lower at $20,000 and the daily ascending trend line.
  • USD: FOMC minutes, July 07: The FOMC minutes were hotly anticipated this week to answer one question, ‘are the Fed serious about bond tapering?’ The answer was ‘yes, they are’, but the timing for tapering is not imminent. This resulted in some moderate USD selling as USD bulls were initially disappointed.

Key events for the coming week

  • CAD: BoC rate decision, July 14: The Bank of Canada surprised markets and tapered bond purchases in April. Will they surprise again next week?
  • Seasonal trades: Find a trade, July: This week Deutsche Post raises FY21 guidance and that lifted share prices on the release. The 2021 EBIT is now expected to be more than 7 bln euros. Check out the strong seasonal pattern here.
  • NZD: Inflation data, July 16: Three investment banks projected that the RBNZ would raise rates in November of this year. Will inflation pressure add to those calls for higher New Zealand interest rates and send the AUDNZD lower?

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Legal Forms & Documents

Risk Warnings

Cookies Policy

Disclaimer: Any opinions made may be personal to the author and may not reflect the opinions of HYCM. All expressions of opinion are subject to change without notice. This material is considered a marketing communication and does not contain, and should not be construed as containing, investment advice or an investment recommendation or, an offer of or solicitation for any transactions in financial instruments. HYCM makes no representation and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied by an employee of HYCM, a third party or otherwise. Past performance is not an indication of possible future performance. Without the approval of HYCM, reproduction or redistribution of this information isn’t permitted.

Legal Information: HYCM is the trading name of Henyep Capital Markets (UK) Limited, HYCM (Europe) Ltd, HYCM Limited and Henyep Capital Markets (DIFC) Limited for which the Henyep Capital Markets group is holding company and its assets are a controlling equity interest in them.

* Cryptocurrencies are not available for trading under HYCM (Europe) Limited and Henyep Capital Markets (UK) Limited (retail clients only).

*Any opinions made in this material are personal to the author and do not reflect the opinions of HYCM. This material is considered a marketing communication and should not be construed as containing investment advice or an investment recommendation, or an offer of or solicitation for any transactions in financial instruments. Past performance is not a guarantee of or prediction of future performance. HYCM does not take into account your personal investment objectives or financial situation. HYCM makes no representation and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast, or other information supplied by an employee of HYCM, a third party or otherwise.

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