Interest Rate Spread - Difference in TYX-TNX (30Yr%-10Yr% US Gov't Bond Yields)
The decline in US 30 year bond yield (TYX) relative to US 10 year bond yields was alerting us to a weakening US economy and was setting up this monster trade to sell short Crude Oil (CL1! = front month NYMEX crude oil futures)
Thanks to user @jangseohee who asked me to look at this relationship of TNX to Crude Oil to find this amazing relationship that will hopefully set up future trades. I think this picture tells a story all by itself. The basic story is that if long term rates drop relative to shorter term rates, it means a cooling economy ahead and perhaps lower demand for oil. If long term rates pick up relative to shorter term rates, then the economy is picking up steam and oil prices can rise.
Scroll further back and see how this sets up other trades. For now, they are back together, the profits are already taken.
Tim 10:25PM EST, May 21, 2015
The decline in US 30 year bond yield (TYX) relative to US 10 year bond yields was alerting us to a weakening US economy and was setting up this monster trade to sell short Crude Oil (CL1! = front month NYMEX crude oil futures)
Thanks to user @jangseohee who asked me to look at this relationship of TNX to Crude Oil to find this amazing relationship that will hopefully set up future trades. I think this picture tells a story all by itself. The basic story is that if long term rates drop relative to shorter term rates, it means a cooling economy ahead and perhaps lower demand for oil. If long term rates pick up relative to shorter term rates, then the economy is picking up steam and oil prices can rise.
Scroll further back and see how this sets up other trades. For now, they are back together, the profits are already taken.
Tim 10:25PM EST, May 21, 2015
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The spread opened up on hopes for OPEC production cuts and a strengthening Trumpoconomy and then promptly closed again.
March 31, 2017 4:57PM EST