Demystify the reasons behind the US bond yields you need to know
News side:
News side:
1. According to news from Jinshi, a senior official of the Bank of Japan stated that the Bank of Japan currently has no plans to release a central bank digital currency, and this position has not changed. The BOJ will start testing the technical feasibility of the core functions and features required for a central bank digital currency starting in April. The Bank of Japan believes that launching a central bank digital currency experiment at this stage is a necessary step. Central bank digital currencies have the potential to provide a means of payment and settlement, and may thus make such systems a global standard. If we are to issue a central bank digital currency, its design needs to be consistent with the structure of future payment and settlement systems. When designing a central bank digital currency, we need to engage in close dialogue with major payment service providers.
2. Glassnode data shows that the realized value of Bitcoin has reached 16,933.19 US dollars, a new record high. Note: "Realized Market Cap" is the market cap calculated by summing up the market price of Bitcoin at the time of the last on-chain move.
3. CoinDesk published an article on March 26 stating that as part of US President Biden’s US$1.9 trillion relief bill, the US government issued a US$1,400 stimulus check, and cryptocurrency exchanges did not see the expected surge in Bitcoin purchases . However, the CEO of the US cryptocurrency exchange Voyager said: "While it is too early to comment on the amount of funds that the recent stimulus package has brought to our platform, we should note that in the previous stimulus package, we saw We have received massive deposits, comparable to a single stimulus check."
4. According to news from Jinshi, US President Biden said that most economists predict that the US GDP growth rate will exceed 6%.
5. According to Jinshi news, the Federal Reserve Bostic stated that the use of Bitcoin is not large and does not pose a threat to existing currencies. And said that there is no rush to establish a central bank digital currency, and its implications must be better understood.
6. According to Sina news, the Central Bank of China: The digital renminbi will coexist with Alipay and WeChat payment.
7. According to news from Jinshi, Federal Reserve Chairman Powell: We are firmly committed to maintaining an average inflation rate of 2%. As the economy recovers and the target makes substantial progress, we will reduce bond purchases.
The latest news about US debt can be said to be seen every day, so the godfather is here to briefly talk to you about US debt. First of all, let me popularize a concept with everyone. The reason why the yield of U.S. bonds soars is because the interest rate of bonds is fixed. Yields will only soar when bond prices fall, so to put it bluntly, someone is selling U.S. bonds aggressively.
There are two mainstream explanations for the current market. The first is that the soaring yields of U.S. bonds are due to concerns about inflation and the Fed’s interest rate hikes. First of all, the Federal Reserve has already said in its early stage that it will not raise interest rates before 2023, and the direct benefit of inflation is the weak trend of gold. Just a few days ago, the price of crude oil plummeted by 8%. How should this be explained?
Another way of saying is that the U.S. economic recovery has exceeded expectations, and the strength of U.S. stocks is a good proof. Let's not talk about the 3% drop in the Nasdaq a few days ago. The point is that there are still more than 10 million unemployed people in the United States. The number of unemployed people announced just earlier has risen again. How can this be explained?
So the godfather concluded that there is no other direct reason for the soaring yields of U.S. bonds, that is, in the past few years, too many bonds in this country have been issued, making them worthless. The world is the same where things are rare and expensive, but the more More is more and more worthless. Therefore, many countries, including Russia, Japan, and the United Kingdom, have been dumping U.S. bonds as early as last year, and the last two times when the yields of U.S. bonds soared concentratedly occurred when the United States and Europe went to bed at night. At the same time, it is also the end of the Asian stock market, so everyone can guess who did it.
Recently, an entrepreneur friend of the godfather also asked the godfather whether the rising yields of U.S. bonds and new highs will lead to the collapse of the U.S. stock market and the plunge of gold, or will cause the risky assets to turn upside down. But will it really lead to this, the godfather will not draw a conclusion. The yield on U.S. Treasury bonds is the interest you get after buying U.S. Treasury bonds. If U.S. debt is calculated according to the maturity, it has a maturity of 1 year, 2 years, 10 years, and 30 years.
The godfather here gives a very simple example. For now, the yield on the ten-year U.S. Treasury bond is 1.6%. It is a new high for more than a year, so this means that if you spend 10,000 yuan to buy this bond and hold it for ten years, you will get 160 interest income per year. Let's talk about why it has soared. First of all, everyone must understand that the bond yield is inversely proportional to the purchase price. The lower the price, the higher the yield, and everyone knows that a sharp rise in the yield of U.S. bonds will lead to a sharp drop in prices.
This means that a large number of treasury bonds have been sold at low prices. Simply put, the U.S. treasury bonds, which were called a safe haven, are no longer wanted. Then the question arises, under what circumstances will no one want the US treasury debt. There may be two reasons for the godfather's speculation. First, I fell in love with a more profitable business. For example, the stock market this year is good. I want to get in early, then I'll sell bonds and buy stocks. It doesn't matter if it's sold at a cheaper price. The other possibility is that I need money urgently for urgent matters recently.
3.26 Market Strategy Layout of the Godfather of Coin Speculation
Bitcoin:
The trend of Bitcoin in the early trading is still quite strong. At present, the 1-hour Bollinger Bands are gradually opening, and the bottom has experienced long-term shocks and is relatively stable. The K-line shows signs of continuing to rise. The MACD fast-slow line of the indicator in the sub-chart is still rising with the golden cross, which drives the red kinetic energy to increase. The KDJ indicator turned slowly downward. Based on the general trend at the 4-hour level, Bitcoin is generally bullish within the day, and it is enough to step back and do more in the short term.
Operation suggestion:
51700 and 52000 are operated in batches, defending 51300, and the target is 53300 and 54200.
The godfather of currency speculation has been in the currency market for 7 years. From being ignorant at the beginning to becoming familiar with it later, from losing money at the beginning to making money now, from making orders blindly before to investing rationally now, from fighting alone before to now with a team operate. 7 years is just the beginning, what I want to do is 20 years, forever. I firmly believe that those who do everything for 7 years must turn an industry from a public to a professional. The content of this article is exclusively planned and released by the team of senior analysts, the Godfather of Speculation (public account: Godfather of Speculation). If you want to know more about real-time investment strategies, solutions, methods, trading techniques, operating skills, and K-line, you can add it to my learning Communication, I am the godfather of currency speculation, I hope to help you find what you want in the currency circle.
