Last week the U.S. index meandering narrow fluctuations, bias on the restrained and bias depreciation continued, the final indicator closing depreciation of 0.2%, the amplitude of only 0.9%, the highest and lowest difference of 80 points, closing 92 points edge. Observe the U.S. index trend outside, the most important thing of the week is the U.S. bond posture is very strange and mysterious, especially the biased yield decline implied implication is more worthy of attention.
U.S. bond yields down the line to pave the way, the upside target is clear and unchanged. Changes in U.S. bond yields were more prominent throughout the week, with the weekend showing a rebound of 5 basis points in the U.S. 10-year Treasury yield, climbing to 1.34%, which directly eases market concerns about the economic slowdown. Before that, however, the decline in U.S. Treasury yields confused investors, and the market panic index rose 30% directly, with the dollar’s tendency to depreciate aggravated and the combination of U.S. bonds and U.S. indices highlighted as. Among them, the 10-year U.S. bond yield fell to a low of 1.25% at one point on Thursday, with rising market distress factors coming into focus. Especially along with the release of the Fed’s June meeting minutes, in fact, this movement is implicitly stronger, the U.S. Treasury bond yield logic against the downside in an attempt to stimulate the upside intentions are obvious.
The U.S. index trend on the one hand is a greater technical logic inevitability, the downside is not the purpose, the upside is the actual demand and goal. After all, the current pressure on the U.S. fiscal deficit, the upcoming fiscal year final account is still deficit severe, and thus the U.S. debt absorbing sources of funds technical maneuvers are dominant, it is expected that the remainder of the year Treasury yields upward is difficult to avoid, it is expected that the 10-year Treasury bond or will reach 2% with the possibility. Coupled with the global economy and asset prices bad rise, the purchasing power of U.S. debt may improve, the United States to raise funds path long-term layout is the key.
On the other hand is accompanied by the U.S. stock technical logic and cycle experience, is expected to accompany the U.S. bond up and down the U.S. stock plunge is also one of the possible stimulus factors to promote the U.S. bond yields upward. The general time rule is usually the third quarter or fourth quarter U.S. stock adjustment increased, the U.S. fiscal year special time of play is stronger. Especially the U.S. stock index super strong designability is stronger, the three major stock index up situation has been reserved for the plunge market space and conditions is the focus of the U.S. stock high people. Both the U.S. stock plunge does not affect the basic level of U.S. stock value, the performance of listed companies will not have much change. Especially technology stocks support undiminished, the potential for the stock index protection and protection role will be the key to the important dynamics and orientation of U.S. stocks.
The most important thing is that the U.S. benchmark interest rate upward intention is firm, so just released this week the minutes of the last regular meeting of the Federal Reserve show that the hawkish tone has not changed, the combination effect of the unchanged tone of interest rate hikes is very appropriate to gain momentum. U.S. bond yields downward stimulus upward technical logic implies the Fed benchmark interest rate upward correlation role and stimulus factors. At present, the dollar benchmark interest rate is in the space of no room for maneuvering, with the help of other products and market interest rates to stimulate and drive is the performance of the dollar’s old ways. Especially in the face of the characteristics of the United States personality highlights, the dollar can effectively hedge the risk of not appreciating, but also can take the initiative to design the path with the purpose and direction of advancing interest rates. Coupled with the peripheral environment and associated currency technical logic cycle factors appropriate, the dollar benchmark interest rate long-term planning and trend is the key to consider the current short-term situation worth focusing on.
It is expected that this week the dollar to maintain the current level is dominated by the potential rise of 93 points of power, the probability of partial depreciation subject to asset prices and commodity prices adjustment is greater, the market panic is not comfortable with the situation is more suitable for the dollar partial rise.