U.S. Interest Rates - Three Days Away From a Market Decision
Interest-Rates / US Bonds Oct 03, 2013 - 02:54 PM GMTBy: Brian_Bloom
By Monday night, October 7th 2013, the first chart below will very likely show a resolution. Technically, the probabilities favour an upside break of the 10 year yield. Note how the MACD histograms have been rising
In terms of the P&F chart below, a break above 3% will take the yield to a target of 5.45%
The only way this can be avoided is if a CR (continuing resolution) is passed by both houses and we should understand the probabilities surrounding this by Monday morning. But, if history is anything to go by, the signs have been there for months. Of relevance are three quotes from an article I published on my website on December 23rd, 2012. The article was entitled Fiscal Cliff: Human Arrogance and Economic Consequences
“… it seems to me that the fiscal cliff negotiations boil down to politics rather than economics and, from a political perspective, Boehner can’t cave. It’s not about the fiscal cliff so much as it’s about the chances of Republican politicians being re-elected to their positions in Congress and the Senate. If Boehner caves he will be in breach of his election mandate and that could destroy his personal credibility.”
“….all hell could break loose because he [president Obama] will not be conciliation oriented at a point in time when he needs to be. He will lean towards being dictatorial against a background where his opponents have no room to move – and he will rationalise this as “clever negotiating”.
…Unfortunately, the Republicans in Congress and the Senate have to be seen to be delivering genuine spending cuts or they will face the prospect of losing office. They will therefore be forced to dig their heels in. Obama may not be as clever as he thinks he is.”
Author, Beyond Neanderthal and The Last Finesse
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Copyright © 2013 Brian Bloom - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.
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