GOLD 0.51% $1,391.7 gold futures

last week was certainly wild week - interest rates up very...

  1. 13,021 Posts.
    lightbulb Created with Sketch. 2689
    last week was certainly wild week -
    interest rates up very strongly globally on the long end and many rates in the short end, the end that the central banks control by thier QE went way out of target.  Japan out of target on the short end, Europe all out, USA out RBa out and stepped in etc.

    As the short end goes out of target the long end pops.

    Then there is theories of inflation, or as FED Chair testifies, it shows confidence.  Even more interesting is that the FEd chair says, its not time to tighten conditions, not going to end or adjust purchases

    So rates skyrocket as they have been doing since mid last year.

    A couple of take aways, if your the biggest holder of treasuries in the market by a long short, if you sold 8.2% of yourr entire portfoliop in a week your going to send interest rates on a moonshoot

    This is exactly what the FED did.
    The dumped 8.2% of thier entire portfoliop of treasuries it bought in times gone buy to pull down and pinn interest rates lowerin the week ended 23rd FEB

    Thats masssssssssssive, now he might be buying at a rate of 120BLN a month, but the FED was a net seller reducing thier treasuries balance held by a whoppppppppppping 8.2%.  When you sell that much as the biggest holder by a country mile buyers are going to demand higher rates,

    buy the looks of it at 1.25, they demanded more (buyers) and then thinking the selling was over rates across the curve came back in a bit, but then another spike up as the selling was clearly not over.

    Treasuries held by fed 16th FEb 1568893 BLN
    A week later 1439646BLN

    Thats enormous sell down which had an affect of rates prices, sure he (fed chair) can claim its not inflation and probably a sign of confidence - sure, but the reality is selling down net 129247 ish BLN of treasuries in a week is going to send rates upski.

    Federal Reserve Board - Recent balance sheet trends

    dramatic sell down of treasuries from the major holder is going to result in dramatic rise in interest rates.

    They say one thing but they did the dramatic opposite -

    reasoning - have no idea why the liquidation of such a large percentage of the treasuries held given their speeches, announcements and resent testimony to congress.

    Obviously such a dramatic increase in interest rates had consequences for many market items , including gold.

    what will they do this week, who knows but an interesting data set

    good luck
 
watchlist Created with Sketch. Add GOLD (COMEX) to my watchlist
 
arrow-down-2 Created with Sketch. arrow-down-2 Created with Sketch.