Problem in US market mysterious phenomenon bonds

The problem in the US market: the mysterious phenomenon bonds returned

It seems that investors are not
can get enough American
government bonds. Despite the fact that the head
Fed Janet Yellen hinted strongly
Last week, the regulator can
to raise interest rates in June,
Investors went out and bought more
bonds. The yield on 10-year Treasury
bonds, which was
at the level of 2.11% last week, fell
to 1.94% during the press conference Yellen
on Wednesday. And it still varies
around these levels. Typically, the yield
Bonds has always lowered when prices
grow.

But here’s the problem: the situation
the market should be fully
the opposite – when the Fed increases
rates, bond yields should
go up. Alan Greenspan once
I dubbed this "mystery". He was
concerned about this 10 years ago, because
that complicating the Fed’s job.

Former Fed chief
used this word in February 2005,
to describe the fact that the long-term
Treasuries lost yield,
Although the Fed raised short-term rates.

Current chairman
Yellen Federal Reserve System
I have not yet spoken about this “enigma”
bonds. But you’d be surprised if she does not think about it. The fact is that usually
raising rates on short-term
loans made to
keep the economy and financial markets
from overheating. The yield on 10-year-olds
government bonds is an important reference
point for consumers and investors.
It also affects the rates on mortgage
loans.

many financial
experts believe that the long-term
interest rates were too low
long – they say it is from the middle
2000s. In their view, low rates
helped to create a bubble in the market
property, which led to a great
failures in the sector, and the Great Recession
major crisis credit sector.
Of course, Yellen would like to avoid such
terrible consequences.

But low yields
long-term bonds are often
a sign of economic weakness. If
The Fed wants to raise interest rates,
when the market is concerned about the slowdown
economy, it can once again become
problem. Simply put, the bond market
The Fed seems to be saying that the economy is still
not strong enough to adequately
to respond to the increase in rates –
even the smallest.

And another warning
by CNN-Money: Yellen may
"speak" a higher yield
bonds than it actually is. This
trick often used Greenspan. After
his mention of the “puzzle” of bonds
in 2005, the yield on 10-year bonds
It grew from about 4% to 4.7% for
a few weeks.

The Fed is still there
$ 4.5 trillion on its books. Despite
that the Fed is no longer buying new
bonds, it still reinvests
principal payments on bonds. Yellen
again said last week that
The Fed will continue to reinvest in the market
bonds, until he feels that
“Economic conditions are sufficiently
appropriate to start raising
rate. ”

Of course, worry about
many bonds – even among foreign
customers – in particular, China and
Japan – there is a large volume of Treasury
US bonds as the market
The US is still considered the safest
market in the world to invest their money. In addition, bonds
become even more attractive
now, when Europe began their ransom
The program of quantitative
easing (like the one held
Fed up of the previous year). profitability
European bonds even lower than the
rates on US debt securities. but this
mystery can not last indefinitely.
Sooner or later, the bond market or
The Fed itself will signal that
it’s time to change something.

If the 10-year bond
stay at such a low level when
The Fed will start tightening monetary
policy, there is a risk that short-term
interest rates will be higher than the long-term
interest rates. This phenomenon economists
called inverted yield curve.
And it’s not very good – it happens
before every recession in the last 50
years.

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Asian markets rise Nikkei updated 15 year record

Asian markets rise, Nikkei updated 15-year record

Today
Asian indices ended the day with growth.
The sensation of the day – the Japanese Nikkei,
which is added 1.1% and for the first
the last 15 years was trading above $
20000 points. MSCI Asia Pacific rose
0.6%; Hang Seng added 0.3%;
Shanghai Composite firmed 2.4%.
Only Australian S P / ASX
200 finished the day in negative territory, dropping
0.6%.

Cause
another Japanese growth index for
experts, is
In March the first time in three years fixed
the surplus balance of foreign trade.
The volume of Japanese imports in monetary
terms decreased sharply, and the attenuation
yen against several major currencies has helped
to increase export earnings.

AT
Wednesday rose Japanese banks and brokerage
Company: Nomura Holdings added
4.5%; Mitsubishi UFJ Financial Group added
3%.

Growth
the Chinese market due to the high
Market expectations are likely to grow
volumes stimulate authorities. Shanghai
Composite today renewed a seven-year
maximum. Increased shares of commodity and
Energy Chinese companies.

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Most Wall Street on Wednesday lowered its triple

Most Wall Street on Wednesday lowered its triple quotes

stock
American indexes fell on Wednesday: impact
the largest drop in the last year
US GDP. Analysts had expected an increase of 1%
but in fact it turned out that the GDP added
only 0.2%. Against this background, DJIA fell
to 0,41%, S P 500 lost
0.37%; Nasdaq Composite fell
0.63%. US Federal Reserve also not made clear in the
the question of raising rates.

reporting
Corporations, too, affects the market
situation.

So, Twitter continues
fall: the company’s revenue has fallen short
the expectations of experts, whereby the service
microblogging lost another 8.9% in prices.

US Steel said goodbye
with 12% of capitalization: in the first quarter
all of a sudden the company recorded
loss and reduced annual forecast
arrived.

Operator
Casino Wynn Resorts Ltd lowered
the value of its shares by as much as 17% due
disappointing statements I
quarter. The company decided to
cut dividends on securities
2/3.

Strong
financial indicators for the I quarter
allowed GoPro shares jump
13%.

In short,
run-loss volatility and / acquisitions
the US stock market significantly
increased.

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Oil fell sharply on Thursday evening and now

Oil fell sharply on Thursday evening, and now timidly tries to recover

Yesterday, oil quotes
much fallen on the forecasts in anticipation of the meeting
OPEC, which should decide to keep
current oil production quotas or not.
Following the auction on Thursday, the futures price
Brent crude oil with
July delivery fell to $ 62.12
per barrel, WTI – up
$ 58.00 per barrel. Today, the price in the morning
a little rose – Brent reached
to $ 62.26
a barrel and WTI – up
$ 58.13.

Recall that today
It will be the first for this year’s summit
OPEC. If the cartel confirms the existing
quota for oil production at 30 million
barrels per day (or even lift
it), it will push oil prices down
and bad for the oil producing currencies
countries. In particular, such a decision can
an extremely negative impact on the course
Russian ruble.

“OPEC sticks
strategy for gaining market share,
therefore, reduce the quota for the production of the cartel
not profitable – says Ekaterina Krylova,
PSB analyst. – To end
year we expect oil price
$ 61 per barrel, and the short-term
– $ 62-65 a barrel. There is,
however, the risk that the price will fall below. “

As experts estimate,
OPEC is already producing more than 31 million
barrels of oil per day, which is
the highest since the end of 2012. plus another
Complicating the situation is Iran, which is not
first time declares that he is ready
regain market share and again
become an active exporter of OPEC. Minister
Oil Bijan Namdar Zanganeh country
said that Iran, after the lifting of sanctions
rapidly regain its strength and
enhance production at 1 million barrels per day
(Now – 2.8 million barrels per day).

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IMF suddenly broke off negotiations with Greece

IMF suddenly broke off negotiations with Greece on Thursday night

Yesterday
evening of the International Monetary Fund
suddenly withdrew their representatives
from Brussels, where once held
rescue program round of talks
Greece from bankruptcy and a Classified
defaulting on its debts.

representatives
IMF explained this step by the fact that the negotiations,
in fact, stuck in place, and differences
the parties are too big, and these
differences relate to minor,
and the basic provisions of the transaction. Press Secretary
IMF, Gerri Rays, said that until
agreement, the parties are too far away. Now the IMF is waiting for steps forward on Greece.

tension
growing: last night the president
EU Donald Tusk in the strongest possible terms
He commented that “the time for games is over.”

Yesterday
source WSJ
diplomatically
field say that it is quite possible,
meeting in Brussels was the last
attempt to make a deal possible.

thirty
June ends Assistance Program
Greece, and at the same time the country should be
to pay EUR 1.6 billion to the IMF. analysts
and political circles believe that Athens
I can not find the money, if not
get help from the new “trio”
(European Commission, ECB, IMF). June 18, a regular meeting of eurozone finance ministers, and many market experts expect that on it will decide the fate of Greece.

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Gendhis EURUSD

Gendhis EURUSD

Scalper Gendhis EURUSD – is a fully automatic expert who monitors the speed of price movements and uses a filter on Bollinger Bands. Advisor sets the pending orders to the upper or lower Bollinger and waits for the breakdown of these levels.

This EA is only for pairs EURUSD.

requirements

Not all brokers are suitable for use by the advisor. Broker is needed with a low spread, low brake level and the time of execution of orders less than 100 milliseconds.

  1. Broker with a 5-digit quotes.
  2. It is recommended to choose the ECN-broker with low spreads and fast execution.
  3. The minimum leverage of 1: 300.

Options

  • Fixed Lots: Used only when UseMM (money management) = false.
  • Money Management: Set to True to use the automatic lot size.
  • Risk percentage: Risk as a percentage of the balance, 10.0 – 10% percent of the balance.
  • Max Spread: The maximum spread, in which the adviser is allowed to trade (in pips)
  • Stop Loss: Stop Loss in pips as large as possible.
  • Start Trailing: The distance from the opening price of the order before the trailing (in pips).
  • Step Trailing: The distance from the current price for the trailing (in pips)
  • Start Hour: The hour of the opening of orders
  • Stop Hour: Hour of end opening orders

Gendhis EURUSD

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Iran reached agreement on its nuclear program

Iran reached an agreement on its nuclear program, oil instantly collapsed

Iran and representatives of world powers
We have reached an agreement – the country will deter
its nuclear program in exchange for
easing of sanctions, the official said,
involved in the negotiations in Vienna.
The agreement promises to stop the 12-year
opposition on nuclear activities
Iran, which sometimes turned into
threat of military action by the United States,
as well as from Israel, which, incidentally, has insisted that the Americans
refused the deal.

Even yesterday, the head of the
Organization of Iran Atomic Energy
Ali Akbar Salehi said that the parties
almost all agreed specifications
the details of a future agreement. base for
these negotiations have been agreed,
reached earlier in Lausanne. But,
Iranian experts have agreed on
introduction of a number of restrictions on their
activities in the nuclear field, but also
able to ensure that these restrictions are
not hinder the work in the field of peace
atom. Salehi noted that uncoordinated
technical issues remains, and
He added that the sides are still
to study the text drawn up by the document,
to work out the wording in detail.

crude oil
Brent has fallen to a mark
$ 56.98 a barrel at 9:34 MSK after the news about the agreement. By 10:00 MSK Brent was traded at the level $ 56.98
a barrel.

Full implementation of
the agreement will take several months and
depends on the speed with which Iran
will fulfill its obligations. with
time lifting of sanctions will allow the rich
oil country to increase its exports,
access to international finance
and open the door for global investors.

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