Скачать или смотреть 10 Year Bond Inversion and Commodity Decline

Finally there’s some hope in the raw materials markets. Further declines are indicated in the commodities futures market. Prices for future delivery are significantly lower than current spot prices for most commodities, a phenomenon called “backwardation” in commodity traders’ parlance. Among others, Cotton and Crude oil have notable steeply backwardated futures curves. 40% price declines in cotton and oil are indicated over the next 9 months.

It’s crazy that the 10 year is trading at the same yield as a 6 month, and everything in between is higher. The yield curve inversion is much smaller on Inflation Protected Treasuries (TIPS).

The 10 year is benchmark of sentiment as well the treasury most commonly linked to mortgage and borrowing rates. So It’s saying more about the investor confidence in the US economic growth. I think the 10 year is reflecting fear of recession and the negative guidance we’re seeing from growth companies. It’s fear around the Fed’s ability to create a soft landing. There’s not much confidence right now.