W/C 14th Apr - Will US Treasuries continue to sell off this week? And add further pressure to DXY?

Watch out for Good Friday and Easter Monday as the quietness in the European markets could create trading opportunities elsewhere

As usual, my apologies if any data and/or information has changed as a result of Asian/early European trading. It is quite wild out there at the moment!

Let’s start this Weekly Open with Bond Yields and specifically the 10 Year US.

Bonds Yields are normally stable. To see them jump approximately 0.65% in a matter of days is a big deal! Recent podcast guest Dr Nomi Prins mentioned that this in our recent podcast ‘Tariff turmoil, bonds, stocks, the Fed and Gold’. Given Dr Prins experience in working within the banking sector, this jump is not to be ignored and is likely sending a major macroeconomic signal.

As mentioned in the podcast, it is highly likely that The Fed will come to the rescue. They have done so before and will likely do so again.

At the time of writing, there is a 23% chance that the US 10Y Treasury yield will be above 5% by the 30th June.

Given that the 90-day tariff pause is likely to end around the 4th July, it would not surprise me to see China (and the EU) to look to continually aggressively sell off US Treasuries, thus creating further volatility. That being said, my belief is that Trump and team need (and want) that yield to be as low as possible so that they have the ability to refinance approx. $9 TRILLION of debt moving forwards.

The mainstream media might be desperate to overplay the fact that China is ‘evaluating the impact’ of 145% tariffs and various possible exemptions. Don’t get me wrong, it is good news that there could be some form of idea of an agreement moving forward but my pigeon’s instinct says that the cards have been put on the table and that the damage/trust has already been damaged.

We’ve unfortunately had to mention a few times that the world is heading to a dark and dangerous place. War looks increasingly likely in Europe and they have just pledged another $23BN in new military support. Quite where they think they are going to get all this currency from is beyond me.

Obviously it will be printed into existence and this will no doubt be very inflationary for Europe moving forwards. If you have not yet got out then your window for doing so is diminishing on a daily basis.

Whatever way we want to look at it, all of the above is likely very good for Gold!

That being said, we will start the weekly open by deep diving into the Major Indices, starting with the Dow Jones. Have a look at the 5-minute, 1 Hour, Daily and Weekly charts below.

DOW JONES

The first major spike was on the back of ‘fake news’ and the second major spike was on the back of Trump announcing a 90 day pause on tariffs sans China. Insider trading aside, it was quite a roller coaster ride. My thesis is that we are heading for a blow off top but it would not surprise me to see a downward move from here before The Fed steps in - and then likely off to the races as a result!

The tech heavy NASDAQ (QQQ) also looked similar last week.

NASDAQ

Along with a special audio recording for paid subscribers, lets have a look at the DXY, VIX, HYG, S&P 500 and precious metals…………..