As the most important market of controlling the , those "jigou" ( securities company hedging manager in Chinese) are buying this market into Renminbi interests lower which is canceling the 13th. March hike. This has caused 3 months lower in China till the June. ( maybe they're saving their ass from the buying failure in 2016)
There's a system bug between "zhengjianhui" ( China Securities Regulatory Commission in Chinese) and the PBOC as an administration absence in China 10 year bonds future market.
This market has no administration, crazy...
I here urge the China authorities assembling a super administration bank like the U.K or the USA as soon as possible. With a new rising cycle beginning those bugs could damage the safety of financial system in the future
I also here urge the FRB and the USA authorities calling the China government to look at this market very carefully. Because it'll make your inflation fails too.
Let's look at some mathematics here...
The fall could be abysmal.
To be clear, this is not a trading signal service and the time is often long ahead of the moving, if you trades technics then I suggest keeping trading it, long term perspective and correlations are analysts specialties, where you should avoid those big risks you can't afford.
The PBOC may softly raise deposits interests once for 2017 in August where western central banks in summer holidays.
The inflation is crashing now, be careful, it's the final squeezing and may consolidate for many moths for waiting A shares topping cycle.
Looking back the China bonds market, it's crazy, it's no administration in there...
Be careful, Renminbi middle term interests is going into negative area.
My point is clear. Before the hike western investors should avoid buying any of China assets in case your investment shrinks in the future.
China has developed nuclear weapon on the hardware side but on the software side the market hasn't been developed well. There're still many things have to learn from western culture.
"Too much arrogant makes it stupid."
"zi da yi dian nian ge chou." in Chinese.
Looks like FRB will cut sheet by in stead of purchasing more government-guaranteed enterprises real estate mortgage bonds. The China PBOC is holding 10Y US government Bonds. They will be stupid enough to hold it. I don't think the PBOC could buy government-guaranteed enterprises real estate mortgage bonds.
08/17 the fed buys $420 million of government-guaranteed enterprises real estate mortgage bonds.
08/18 the fed buys $1.19 billion in government-guaranteed enterprises real estate mortgage bonds.
08/22 the fed buys $1.65 billion in government-guaranteed enterprises real estate mortgage bonds.
Source: ( News in Chinese. We have 1,550 Billion Chinese Yuan 2007-2017 China 10 year bonds matured in the August and later months where's a very sensitive window to the market)
"The deposite reserve requirement at commercial Banks in a low of 1.3%, the central bank's liquidity of hedge operation is necessary."
The PBOC starts to purchase China 10 year bonds future market again or saying they're flushing the bonds market, of course there will be a stream flowing into the stock market.
U.K BONDS 10Y yield is crossing the trend line.
We've known the Bonds bulls are done, with the FRB cutting sheet, Renminbi's deposit hike looks like underway after the important 19th. meeting.
It's delayed by 2 years from the US dollar's hike, unbelievable late... 2 years has been wasted...
In a condition where the US dollar will do a QT (quantitative tightening) and hikes more with keeping the USDCNY stable, the Renminbi's tightening and hikes will continue.
This chart is not a signal.
This's the newest prediction which will meet the 6.83 plat form and an USDCNY pegging for 20 months for sharing the same inflation with USA (will be lower after 20 months pegging).
President Trump prefers regularity and force, this is what he wants and also fulfills the China new dictator's growing appetites... ugly than Trump.
My chart published on 24th. June 2017 showed a final target at 0.4% with a crab pattern.
The real interests is showing us that the Renminbi's inter bank interests has the same level in Nov. 2014 at 4% in 3 months swap and in all terms. The cutting condition may have been met. This cutting prediction is only for the USDCNY plat form ( Now it looks like the 6.8ish for avoiding the 6.83 truncation before) Which will be a "jiangzhun" because the deposit rates is very low.
Source: China Foreign Exchange Center website
I have to say China bonds market is a shit.
Traders should know that the interests hiking will attract the buyers and the interests is dropping from mathematic negative correlation.
Now you see the China is a shit market.
2016/10/21+20 = 2016/30/21 = 2016+24+6/21 = 2018/6/21, so we should have an hike window in Chinese Renminbi on that Date. Also after an hike we should have an hiking cycle may last in 12 months (2016/10/21~2017/10/31) at least.
The hike on this Dec. 2017 maybe "the last" one in Dollar, the FRB may let the market go firing at will...
2013/12+20 = 2013+32 = 2013+24+8 = 2015/8 where the Renminbi devaluation day, we have had a new cycle plus 20 months. New window on
2015/8+20 = 2015+28 = 2015+24+4 = 2017/4 where the Euro's gap and USDCNY has been topped for 4 months after the hike on Dec. 2016.
2, If we consider the USDCNY 40 months rising as a Renminbi measuring inflation and we use Dollar hike on Dec. 2015 as the Dollar devaluation inflation, then we should have a cycle on
2015/12+40 = 2015+52 = 2015+48+4 = 2018/4 where the Dollars inflation top. This means what guys, this is predicting where the hike ends in US dollar.
3, Now let's check on the 2004-2006 hiking cycle, a same cycle of 2 years duration. The Renminbi's hike was on 19th. Aug. 2006, the Dollar's hiking was ended on 29th. June 2006. "This's saying that if Renminbi hikes then Dollar hiking should've ended "before" Renminbi's hike."- Victor.Y.F. But how the hiking could end before something might happen?
The answer is simple, "wait and see..."
The Dollar had a 3 months pausing of each hiking, the Dollar hiked on June then paused and the Renminbi hiked on August, so on Sept. 2006 the Dollar hiking ended by in stead of the Renminbi's hiking before it.
4, Here comes the predictions:
If the hike on Dec. 2017 will be "the last" one in US Dollar, then we should see Renminbi's hiking in 2018 ( the Spring Festival is on 16th. Feb. 2018). Every 3 months we shall have the hiking window in Renminbi ( on Feb is a Festival , on April is the Dollar's inflation top has been calculated in section 2, on June is the China 10Y yield window) and after that the FRB should end the hiking "before" it.
It's more likely that the new FRB members may let the inflation run to the top in several months until an hiking from Renminbi then they should announce its ending officially by delaying 3 months.
Very interesting, check out the 2019/4 is the US inflation top... in fact, it's all about the inflations. From cycle perspective, on 2019/4 is the first target, then we should have the second target by using money policy as the higher top.
"Winter is coming" - from TV series Game of the Throne. in China. western markets are all good, also in the EEM market, but not the China. It's a compensation.
The bonds market, A shares, China inflation, USDCNY, CNYJPY, where’re affected by the influence of the purchasing they still need to be observed very carefully now.
"On November 30, the ministry of finance of the People's Republic of China issued 7 billion yuan of bonds in the Hong Kong special administrative region. Among them, the bidding for institutional investors was 6.5 billion yuan, including 2 years, 4 billion yuan, 5 years 2 billion yuan, 10 years and 500 million yuan, with the winning rate of 3.90 percent, 4.10 percent and 4.15 percent respectively. The issuance of 500 million yuan to the relevant foreign central Banks and regional monetary authorities, including the two-year period of 300 million yuan and the 5-year period of RMB 200 million, will be issued at the interest rate of the same maturity Treasury bonds."
We're looking at this chart as a 7 wave correction. If the purchasing has begun then it is changing everything in the forex market in a mid term perspective.
The purchasing is just beginning. US bonds Yields may go higher with USDJPY but shall be topping after Renminbi’s hike, or saying with China’s helping the inflation, the US hike shall pause. Also need to be careful with the Yen. We may see the USDJPY higher and XAUUSD higher together but XAUUSD flat.
This maybe strange but very common in the cycle of 2006-2007.
See? The purchasing is just beginning, as predicted before. The FRB is doing new QE without telling the market.
You could find that the negative had begun in summer 2014 or April where was very earlier than you could image. It's a Renminbi's devaluation day before that, also beyond your imagination.
If China don't solve NK problems, the USA will solve it. Trump would do it very quickly with his personality. A best hedging manager we've ever seen, in the geopolitic strategy.
China is stupid, still making it worse......
Everything has its beginning has the end. from the Movie "Matrix" episode 3
We're changing our point of view where 0.4% target on US10Y.
We've predicted yield 4.75% target on US10Y in a long term perspective. Where China is selling US bonds in the bonds market and Japan hasn't sold them, yet.
In a positive condition, a sell is the real one. After this week end, central banks should have communicated during the holidays. There are 2 choices:
1; keep up 0% and buy with big capital.
2; submarine dive again and let it sell.
Which one is preferred? Let's see.
The question here is: "What can make USA hike pause?" Traders shouldn't take it for granted that USA hikes can last forever. Many factors can pause it, especially the stock market may be out of control.
The BOJ pretended "purchase again" could help it.
The China hike is still possible, yearly meeting on March 2018, is the key meeting for electing a new President. The PBOC Mr. Zhou will retire soon. We eye on some ambitious leaders who are better than him, or worse. Any way, China needs do something here ......
Traders now should look for US10Y yield slightly breaking to 3.05%, after that BOJ may recover positive correlation with USDJPY.
The 22nd. Feb. 2018 chart should work.
This chart is more clear in a condition we're back to sub zero.
Each time we cross the mirror, the very high yield gap will cause this pair (DE05Y/US05Y) like a car "WINDSHIELD WIPER" to swing crazy. Have you ever seen the 2nd. Feb. 2018 swing?
We shouldn't have played God, into an uncharted territory, and now we should keep it above zero.
We've warned traders that central banks may NOT notice this uncharted territory. The market in forex and markets in stocks are all disordered now. Double squeezing shall cause US dollar rising and inflation crashing.
Please leave stock market or hedge your shares now!
Please look back 2015 crashing. DXY may go down to 86.50 then rises to receive capital squeezing!
1; VIX above 20 again.
2; EA crossed 1.5800 EU zone inflation may go to -2%.
3; Renminbi's devaluation like the Aug. 2015.
4; China incident on March.
Scalpers in forex market should hold short term. It's enough to avoid this kind of risk.
We suggests USA investors here: ( please leave EU zone stock markets, strong Euro dollar until ECB hike)
1; nail on the core inflation. ( along with 10 months SMA)
2; USA stocks need choose carefully in sectors. ( industrial, miners, resources, basic materials, inflation sensitive, avoid high tech and food and agriculture, they're growing too but less)
3; insurance company should focus on USA bonds market buying.
4; when everyone is expecting FRB cut, they're expanding, or saying the cut is done.
As independent analysts, we believe in chart but not what central banks fairy tales.
We don't work for PBOC and China banks they're sucks.
"Former Federal Reserve chairman Alan Greenspan: the bonds market is at the beginning of a bubble."
March 1, 2018 23:20"
Please be careful here, traders... we're on March, the political influences will be huge to the market in 2018.
"We're now at 0.846% yield, almost the same level of the GB02Y yield high on 22nd. June 2015, where has happened China stock market crashing before."
We don't have to start a soft war or hard war to get an inflation trend but need to cancel all negative money policies around the world.
Our prediction is 2-3 deposit interests hikes each one is 0.25% in Renminbi, after that China stocks may crashing, it depends on the speed of the hikes. If the hikes go very slowly, the China stock market may rise with core inflation in China, but still need to watch the interests very carefully.
now a pattern Gartley has been completed...