RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

Interest Rates

The Trend is Your Friend in Treasury Markets

Posted 09/25/2018 11:11AM CT | Frank J. Cholly

So we have had historically low rates for far too long, and leaving rates low for so long didn’t exactly have the intended consequences. All I’m saying is that rates were left too low for too long. However, central bankers all over the globe were also devaluing their own currency and everyone is getting the same results! Very slow growth. That is now changing in the US.

Now we have an administration in Washington that not only gets out of the way for businesses to grow, but has removed a lot of the restrictive policies that have slowed down growth. Not to mention all the tax incentives that allow businesses and individuals to put back into the economy. All of this has contributed to greater confidence in the strength of the US economy. We are now moving towards normalizing interest rates. Treasury yields are now retesting recent highs while treasury futures are poised to break out to the down side.

I think that we are still in the early stages of a long-term bear market in treasury futures. The trend down is your friend.

10-Year Note Daily Chart

10-Year Note Daily Chart

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Frank J. Cholly

Senior Market Strategist
Frank brings his clients more than twenty-six years of commodity futures experience. He was a member at the Chicago Board of Trade for 10 years where he filled orders in the grain and financial pits. Frank was also a Lind-Waldock's floor manager for ten years and later joined on as a commodities broker.
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