원문 보기
this video is sponsored by real vision on the show we've talked a lot about trade Wars monetary policy and their effect on markets especially the bond markets if you've been paying attention to the financial news then of course you've been bombarded by bond market coverage you might have seen that our boys stand Druckenmiller said in an interview with the Economic Club of New York that he went from 93% invested to net flat and bought a bunch of Treasury after reading one of trumps infamous trade war tweets well he isn't alone in that opinion today we're gonna explain why everybody is talking about treachery and it's all going down on this week's episode of real visions the one thing what's going on investors 8k here so drug bought Treasuries for protection in his own words he's not trying to make money he's just not trying to play the game buying Treasuries for their safety seems to be a fear driven action but the motions of fear and greed are curious partners in crime and some traders are looking at Treasury through a greedier prism Rob Paul the CEO of real vision recently wrote a report for the macro insiders called buy bonds buy dollars where diamonds where he adds conviction to his bond position Rob Paul explained that guys like Druckenmiller and Soros make a majority of their wealth during the down part of a business cycle that's when people don't want to own bonds but they need to own bonds dr.
Kamal sreekumar sat down with real vision and expressed similar thoughts the argue that slowing growth and the trade wars would push the market into US Treasuries which would bring yields down he discussed the relationship between bond yields and bond prices and talk about where he thinks Treasuries will know namely trade wars are going to be good for US Treasuries and then you know inflation is going to be very good for it as well and the expectation of low economic growth is also a positive think about what a nominal bond yield is it is the summation of your expectations on inflation and what you think is going to happen to growth if real growth is going to be very high you will be prepared to pay a very high interest rate and I will demand a high interest rate to lend to you and that is not only with respect to the private sector individuals but with the US Treasury as well and I took the position that despite the Trump there tax cuts around Christmas of 20-17 you yes you will have a few quarters of growth pick up but that's a sugar high just because you have a sugar high and your energy level goes up that doesn't mean you've become an individual with permanently high energy for the rest of your life similarly here I thought it would happen for two or three quarters and then fall off sure enough that seems to be happening right now so the sugar high is wearing off if you look at the chart of the US 10-year treasuries Kumar has been spot on normally coming off the tax break would push Treasury prices lower and yields higher because of increasing fiscal deficits tightening monetary policies and worries about global growth despite that and as a wise man once said in the land of the blind the one-eyed man is king and in the context of the rest of the world's weakness compared to the US two percent return looks pretty good I mean in Germany you actually have to pay the government to hold a German bond that's why US Treasuries are still king despite an increase in supply and deteriorating economic condition dr.
Kumar discussed this further yes the US fiscal deficit has increased and that is not a good thing and therefore they have to issue more Treasuries but look what the market is saying despite that the yield is going down and the reason for that is that there is an immense amount of global demand that is coming from different sources even the threat that the Chinese may sell some of the Treasuries as a retaliatory measure in the trade war has not cost the years to go up so the private german the private french person and the private asian investor is going to say I'm going to seek refuge in US Treasuries so it basically it looks like a bulletproof situation for US Treasuries right now despite a supply increase there still safety in US Treasuries compared to the rest of the world mark you and came on real vision will ask me to give a trade idea with the less binary view on bonds experienced traders like Newton can sometimes spot the bottom or even catch the falling knife on its way down Newton broke down his forecast for US Treasuries it's really right near 2% is going to be very key not only psychologically but also it lines up with a few other technical factors so I would really be a you know seller of Treasuries into that too point 0 1 2 2.06 yield area thinking that yields stop there and turn back higher if we get under 2% and you know you would you would obviously stop that out how high do you see yields going well I think probably initially we could move up you know at least 20 or 30 basis points from there it's that's not a it's not a big move a lot needs to be done we need to get up over to 40 to have conviction that yields can start to trend higher so for me right now it's about trying to really buy a you know a dip in the yield or in this case sell Treasuries as yields get that low over to 40 you can make a more meaningful case for a larger yield rally that would be a breakout of the entire downtrend very similar to what you know I was speaking up in the SP getting up over 2,800 structurally would be important and would this be in the same September timeframe I do believe that's possible just because they've trended very similar yeah so so if we can start to see yields make a stand right now I have a little bit more conviction that equities are closer than Treasuries yields but it's unlikely that we're gonna see one take off and see the other just sit there just given the degree that they have all moved lower togethers the first of those were all trade ideas not investment advice so take it all with a grain of salt the true value in those clips is seeing how professionals build their trading and investing process to reach their own conclusions they should give you an idea about how the market at large is thinking about Treasuries and how the pros are positioning themselves to profit so when legends like drunk joined the party and they agree with pros like POW who are in Newton then it's time to pay attention whether you agree with their thesis or not if you want help building or finding your process so you could identify profit opportunities like this then make sure you subscribe to real vision I'll talk to you next week
Comments 0