BTC iShares 7-10 Year Treasury Bond ETF

Today, most measures of credit conditions are positive, with tight spreads across all of fixed income. Even high yield spreads have come in after a short scare last month.

Gold (IAU) (GLD) prices usually have a strong negative correlation with the US dollar (UUP). Gold, like other commodities, is denominated in the dollar.

The 2s30s spread is the difference between the yield on the 30-year bond (TLT) and the yield on the two-year bond (SHY).

In 2016, Puerto Rico defaulted on constitutionally guaranteed GO (general obligation) bonds. On May 3, 2017, Puerto Rico filed for Title III bankruptcy.

Rising US-China trade tensions have caused all assets, and especially bond markets, to move considerably over the last few sessions.

The risk-return metric for ten-year Treasuries (IEF) are lowest, but also the safest, with a paltry 1.3% volatility and with an average yield of 4.1%.

The US-China trade war escalated very quickly this month. This has caused global equities to plunge and safe havens like gold and treasuries to surge.

The negative interest policy of the central banks is casting government bonds as a futile choice for investors compared to stocks and gold. As a result, bond prices dipped and yields started rising.

U.S. investment-grade bonds can provide investors with a safe and steady income stream. They’re issued by the U.S. Department of the Treasury and corporates. The issuers have a very high ability to service the debt issued. There’s little risk of default.

Yields on bonds don’t remain constant. When they change by the same magnitude across maturities, we call the change a “parallel shift.”

In normal conditions, the yield curve is upward-sloping. As bonds pay only interest (the coupon) until maturity and pay face value at maturity, investors take longer to recover their principal.

Gundlach thinks that we’ve already seen a bottom in interest rates for 2019. US Treasury yields have been hitting lows in 2019.

You’ve likely heard about it in the financial press recently: this ominous, notorious thing called the “yield curve inversion.”

The stock market has seen big moves both ways this week. The S&P 500 (SPY) has surged 1.3% today as bond yields have risen.

Monetary policies have been crucial in determining the movement in precious metals.

As we know, precious metals are closely tied to movements in US interest rates. Bonds and equities are both yield-bearing assets, so a rise in yields often causes a slump in demand for assets such as gold and silver.

The US Treasury is not able to issue any more debt until the debt ceiling is raised, which could increase the volatility in the bond markets.

The core CPI of 0.3% pushed the annual number up by 0.1% to 1.8%.

On January 10, 2018, Bloomberg News broke a story that the Chinese government could be planning to slow down its purchases of US government debt (GOVT).

Gold is a non-yield bearing asset that reacts negatively to rises in the interest rate.

A December rate hike and a flattening yield curve The Fed rolled out another rate hike at its final meeting of 2017. The target range for the federal funds rate was increased by 0.25% to 1.25%–1.50%, and the Fed has signaled three more rate hikes in 2018. Two members dissented to the rate hike due to lower […]

All four precious metals had an up day on December 20, 2017. Gold increased 0.43% on the day and closed at $1,267.80 per ounce.

Precious metals and miners saw some relief on December 13 after the Fed raised rates as expected. Sibanye Gold (SBGL), Aurico Gold (AUQ), and Goldcorp (GG) rose 3.5%, 3.6%, and 5.8%, respectively.

Gold, silver, and platinum all had a down day on Tuesday, December 13, mainly due to speculations over the Federal Reserve’s pending interest rate decision.

The November Conference Board report, which takes October data into account, reported the credit spread at ~1.2—an improvement from the September reading of ~1.1.

Since early September, US ten-year and longer-dated paper has been falling. Rates for the US government ten-year bond jumped from 2.04% on September 7 all the way to 2.36% on October 10.

At the last FOMC (Federal Open Market Committee) meeting on September 20, 2017, Fed members decided to initiate a balance sheet normalization process starting in October.

Another rate hike in 2017 The FOMC’s (Federal Open Market Committee) meeting on September 20 changed the outlook for bond markets (BND). It suggested that the Fed could be looking at another rate hike by the end of this year, along with a balance sheet unwinding program. Gains in August inflation (TIP) boosted Fed members’ […]

Reduced odds for another rate hike in 2017 Fears of flattening yield curves and rising interest rates have completely vanished in recent weeks. The FOMC’s (Federal Open Market Committee) July meeting statement confirmed the concerns about lagging inflation (TIP), making another rate hike in 2017 less likely. Focus has turned to the Fed’s balance sheet reduction […]

The US debt-to-GDP ratio now stands at 106.1%, which means that the total US debt is more than the annual US GDP.

The Institute of Supply Management (or ISM) New Orders Index indicates the number of new orders from customers.

Since the FOMC minutes and the hawkish turn of events at the European Central Bank and the Bank of England, bond yields across the board have been trending higher.

US Treasuries (GOVT) had another roller coaster ride this week due in part to the conflicting views from Fed members and weaker-than-expected economic data.

US Treasuries (GOVT) had a mixed response to the FOMC statement and the Fed’s interest rate hike.

The US ten-year yield fell to 2.1% after the weak US data report, US inflation showed a decline of 0.1%, and retail sales fell by 0.3% for May 2017.

Bond yields of U.S. Treasuries managed to recover from the losses of the previous week. Demand for US bonds receded.

US Treasuries (SCHO) rallied all through the previous week supported by heavy safe-haven inflows into US bonds.

US bond markets are trading on the expectation of an interest rate hike by the US Federal Reserve in June 2017. Last week, bond yields extended their slides.

Demand for fixed income securities will likely be subdued because of excess supply this week, which would mean additional support for bond yields.

Municipal bond issuance has been rising over the last few years. More refundings would cause the supply to rise further.

After expressing his thoughts on the Baby Boomer generation’s having become risk-averse, Richard Bernstein moved on to the topic of the safety of “safe” investments.

The yield on US ten-year Treasury securities fell below the 1.6% mark for the first time on September 26, 2016 due to a rise in demand.

As the intensifying search for yield goes international, Matt examines and shares his thoughts on the different Asian bond markets.

Moving on to the fixed income space, the Janus team sees holding duration in portfolios as a risk.

The break-even rate is the difference between the yields of ten-year Treasuries (IEF) (TLH) and ten-year TIPS (VTIP).

In his July 2016 Insights newsletter, Richard Bernstein stated, “Safe investments are safe until everyone wants them.”

Yields remain at unattractive levels. This has caused yield-thirsty investors to flock to high-dividend-yielding stocks, driving their valuations higher.

Over the years, average returns from municipal bonds (CMF) are in line with the broader index. They outperformed in some years and underperformed in others.

Municipal bonds (MUB) have provided an excellent return in the past year. The returns are even better if we account for their tax benefits.

The ten-year Treasury (IEF) yield has plunged in recent weeks. It dipped from 2.3% at the start of this year to ~1.6% currently, in a risk-off trade.