The belly of the curve is where policy error shows up first
Intermediate duration traded at 89.54, +0.02% today. Five to ten years out is where the market prices the mistake rather than the intention.
Central-bank reaction functions, dollar liquidity, and rates positioning for private investors. Clear scenarios, clearer invalidation levels.
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Intermediate duration traded at 89.54, +0.02% today. Five to ten years out is where the market prices the mistake rather than the intention.
The dollar proxy changed hands at 28.06 this morning, +0.11% on the session. The more useful question is who sets the floor, not where it sits.
A short chart walkthrough of the MSFT levels that matter today.
A central bank that projects fewer cuts than the market expects can tighten conditions without moving rates at all.
The dollar tends to strengthen when the US outperforms and when the world panics. In between, it softens. The middle of that smile is getting wider.
The inflation components I watch for the turn to boring.
The idea that bonds rise when stocks fall depends on inflation staying calm. When inflation is the worry, both fall together.
The hedged versus unhedged arithmetic I track for foreign buyers.
Most of the time the dollar follows the gap between US rates and everyone else's. In a scare, it follows fear instead, and the model stops working.
When the market prices rate cuts well ahead of the central bank, the intermediate part of the curve is the first place the disappointment shows.