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The US debts stopped moving, but the US dollar moved? The "critical point" that the market is worried about may be coming
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Hello everyone, today XM Foreign Exchange will bring you "[XM Foreign Exchange Platform]: US bonds are no longer moving, but the US dollar is moving? The "critical point" that the market is worried about may be www.xmtraders.coming." Hope it will be helpful to you! The original content is as follows:
XM Forex APP News-On Wednesday (September 24), the US bond market continued the narrow pattern of low volume trading, with the 10-year yield slightly falling to the range of 4.118% to 4.098%, hitting the low of this week, which was the lowest since the low of 4.043% last Thursday. The US dollar index, as the 240-minute chart, saw the pullback of the 10-year US Treasury yield since its high of 4.353% on August 20, has www.xmtraders.come to an end. After hitting a bottom of 4.099% on September 16, the price gradually stabilized and rebounded to 4.131%. Although this round of repaired rise has not rewritten the overall downward channel, it has shifted momentum from bear-dominated to long-short tug-of-war. The moving average convergence and divergence index (MACD) double lines are bonded near the zero axis, the DIFF line value is 0.007, the DEA line value is 0.012, and the bar chart shrinks to -0.010, indicating that the long and short-term volatility is fading. The narrowing of the Bollinger band channel further strengthens this signal, with the mid-rail level 4.132% becoming the current anchor point and the price is running closely below it, which often indicates that the market is about to brew a directional breakthrough. Looking back on recent trends, yields accelerated after the Fed's 25 basis points cut last week, but the rebound at the beginning of this week stemmed from a re-evaluation of the policy's "moderate restrictiveness" and avoided concerns about excessive easing. The 2-year yield also hit a weekly low of 3.559%, and the local low was 3.468%, and the 20-year and 30-year yields fell by 0.5 basis points. The curve showed a slight bullish pattern, benefiting from the simultaneous decline in the UK Treasury yields in the long term. Market www.xmtraders.comments from well-known institutions point out that this pattern reflects investors' expectations of global central banks' consistency, including the US dollar indexThe 240-minute chart shows that it has entered a volatile downward trend of more than a month since the peak in early August. It rose rapidly after the low of 96.2109 on September 16. Its current price is 97.6799, with a cumulative rebound of more than 1.4%. This round of upward actions can be thanks to the confirmation of the MACD Golden Cross. The DIFF line 0.0322 and DEA line 0.0176 both stand on the zero axis, and the bar chart is enlarged to 0.0291, and the short-term bull structure is clear. Prices have effectively broken through the Bollinger Bands' middle track of 97.4674, and have launched a positive impact on the upper track of 97.8372, which is closely linked to the simultaneous recovery of US Treasury yields: the stabilization of yields often amplifies the attractiveness of funds returning to US dollar assets, especially in the context of the Fed's policy expectations shift from dovish to neutral. From a historical perspective, although the downward trend of the US dollar index since its previous high of 100.2599 has not www.xmtraders.completely reversed, this week's rebound has pulled the index back from Monday's low, standing out from the simultaneous weakness of the euro, yen and pound. The euro fell 0.5% against the US dollar to 1.1751, and the pound fell 0.4% to 1.3467. In the www.xmtraders.comments, the well-known foreign exchange strategist emphasized that Powell's speech reiterated the balance of employment and inflation, avoiding the risk of premature easing, which directly ignited the defensive buying of the US dollar. The probability of a rate cut of 25 basis points for the remaining two meetings of the year rose to 94%, but the core PCE data (released on Friday) will become a key turning point. If the monthly expectation of 0.2% month-on-month will be fulfilled, it will consolidate the expectation of two rate cuts unless the geopolitical situation in Europe further deteriorates. The transmission of capital is also worth noting: OIS interest rate rose 0.002% to 3.906% in 0x3, 45.2 basis points lower than the average SOFR on the 10th, implying an 85% probability of a rate cut in October. The fundamentals of SOFR dominate in the middle of this week. Although Powell's cautious statement has not changed the market's pricing of the two interest rate cuts this year, the warning of "risk-free policy options" highlights the dual pressure of stubborn inflation and slowing employment, which directly affects the anchoring level of US Treasury yields and is transmitted to the US dollar through policy expectations. German IFO business confidence unexpectedly fell to 87.7, coupled with the decline in UK long-term bond yields, strengthened the global consensus on easing, but weak European data also indirectly raised the safe-haven premium of the US dollar. Well-known market strategist analyzed that weak inflation or employment data may trigger the repricing of the two interest rate cuts at the end of the year, driving further downward trends in yields, and the interpretation of the "one-time" impact of tariff rhetoric has eased the market's immediate concerns about price levels. The market is concerned about the speech of the Federal Reserve Daly. As a representative of neutral parties, his statement of economic outlook may continue Powell's balanced thesis, but any dovish tilt towards the labor market may amplify the expectation of interest rate cuts and lower the yield curve. The capital market has already emerged. GC interest rates show through the benchmark basis that the 5-year paper premium is -26 basis points, 10-6 basis points, and the 20-year paper narrows significantly to -106 basis points. The short position reduction suggests a recovery in demand, but the heavy pressure of settlement outflows will start tomorrow, and the liquidity pumping of US$39 billion may amplify the overnight volatility. departmentSenior users of the segment emphasize the risk of false breakthroughs under the narrowing of the Bollinger Bands of yield, and recommend paying attention to the 4.158% upper track; institutional accounts focus on the positive correlation between the US dollar and yield, pointing out that if the PCE data is moderate, the index may challenge the previous high of 97.9489, but we need to be wary of the exhaustion of bullish momentum. Overall, these voices strengthen the market's reliance on fundamental guidance, and the monthly month-on-month of inflation reports will become a watershed between the US dollar and US bond trends. Next 2-3: The oscillation is built, and the direction is waiting for data to be confirmed. Looking forward to the next 2-3, the U.S. Treasury yield is expected to fluctuate in a narrow range of 4.16% to 4.10%. If the 10-year support is maintained and the 4.150% resistance is tested, it will provide a breathing service for the bulls. However, the narrowing of the Bollinger channel implies that the breakthrough needs fundamentals to help. If the 0.2% month-on-month expectation of the PCE data on Friday is fulfilled, it may consolidate the downward channel, and the yield may retest the low point of 4.099%; on the contrary, strong employment signals will ignite upward action energy and challenge the 4.252% previous level. The US dollar index is gaining momentum on the 97.72 platform. The amplification of the MACD golden cross may push it to charge towards the 97.9489 resistance. The positive correlation with the yield will dominate the short-term path. If the settlement pressure on the capital side is not excessive, the US index is expected to hold the 97.4674 middle track and open up the imagination space to the 100 mark. However, if the yield falls too quickly, the downside risk will point to 97.0986. The overall market will revolve around the Fed's easing path and weak global data. The downward pressure on US Treasury yields may continue to the long end. The rebound momentum of the US dollar depends on the stability of policy expectations. Market sentiment may diverge before and after the data is released, but the tone of wide fluctuations remains unchanged. Keep a close eye on Daly's speech and PCE guidance to capture potential turning points.
The above content is all about "[XM Foreign Exchange Platform]: The US Treasury is not moving, but the US dollar is moving? The "critical point" that the market is worried about may be www.xmtraders.coming". It was carefully www.xmtraders.compiled and edited by the editor of XM Foreign Exchange. I hope it will be helpful to your trading! Thanks for the support!
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