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The ten year treasury skating on thin ice


Greetings....I promise that spring will arrive some day...

The winter doldrums can dull the senses to market activity. Hang on tight.

As a generic factoid, there is approximately $100B of CMBS loans that come due from now thru the end of 2020....And 2020 is not that far out on the horizon.

Deutsche Bank continues to be punished, ( perhaps well deserved?), by the marketplace as its funding costs weigh on this institutions' viability.

A headline from late this afternoon states the the Fed says the US dollar may not retain its dominance...Throw in the fact that some public pensions have purchased cryptocurrency and that China continues as a rabid buyer of gold....

I'm not sure how this all shakes out...But I do know from a technical perspective that the 10 year US treasury futures are getting so very CLOSE to establishing a very important price peak. My longer term weekly and monthly indicators have tuned negative on the sector of the yield curve. For the short term, the technical situation is becoming more critical...If/ WHEN March futures have a daily close below 121-26.5, the the technical indicators have turned neutral from their current bull bias. Take it a step further, a daily close below 121-11.5 signals a trend sell signal. Keep a close pulse on this bench mark over the next few days.
I do think that March 10 year futures can squeeze up to 122-09.5 before they rollover into a deadly bear trend. Unless the 'Plunge Protection Team' saves the day....

From the standpoint of a hedger of interest rate risk, I would pull the trigger to lock in these low yields for 32% of my risk portfolio. When this bear market starts, it'll come like a thief in the night...

Take good care.
Martin

     

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