Hmm... Something Interesting & Sweet is Brewing in T-Bond Market

15. Juli

IEF is a longer maturity, longer duration play on the US Intermediate Treasury segment. The fund focuses on Treasury notes expiring 7-10 years from now, which have significantly higher yield and interest rate sensitivity than the notes that make up our broader 1-10 year benchmark.

IEF`s average YTM is significantly higher than US-T Aggregated benchmark's. Of course, the higher yield comes with significantly higher sensitivity to changes in rates, particularly those at the longer end of the yield curve (10-year key rate duration).

The fund changed its index from the Barclays US Treasury Bond 7-10 Year Term Index to the ICE US Treasury 7-10 Year Bond Index on March 31, 2016. This change created no significant change in exposure.
IEF's narrow focus and concentrated portfolio have been popular, so the fund is stable and easy to trade.

The main technical graph represents IEF' Total return (div-adjusted) format, and indicates on developing H&S structure, as US Federal Reserve tight monetary policy seems is near to ease.

1. Aug.

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Aug 1, 2024

👉 Some fresh data stoked fears over a possible recession and the notion that the Federal Reserve could be too late to start cutting interest rates.
Initial jobless claims rose the most since August 2023. And the ISM manufacturing index, a barometer of factory activity in the U.S., came in at 46.8%, worse than expected and a signal of economic contraction.

👉 After these releases, the 10-year Treasury yield dropped below 4% for the first time since February

6. Sept.

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September 6, 2024

👉 7-10 Year Treasury Bond ETF has surged to nearly 2-years high, as Treasury yield tick-tacking that further fall has to arrive.
👉 TNX (10Y T-Bond Yield) is sitting nearly 3.70% in this time, while FVX (5Y T-Bond Yield) consolidates around 3.50% 2-years low.
👉 Fed key rate is still between 5.25 and 5.50.