Macro Mondays #73 - What the f*ck is happening to Bonds?
Nov 4, 2024
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As the election approaches, the bond market's turmoil takes center stage, especially after a disappointing jobs report. The hosts share humorous anecdotes about a squirrel named Peanut while tackling serious political trends. They dissect the implications of shifting central bank policies on economic stability and inflation. Additionally, China's looming fiscal stimulus raises questions about its effectiveness amid rising local debts. The discussion also touches on trading strategies and the enduring value of gold and silver as secure investments.
41:51
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Quick takeaways
Monetary Metals provides an innovative solution for investors to earn yields on precious metals, addressing the traditional drawbacks of stagnant investments.
The podcast highlights the increasing complexity of the Chinese market, where even minor announcements can lead to significant shifts in trader sentiment.
Deep dives
Monetary Metals' Investment Opportunity
Owning gold and silver can serve as a hedge against inflation, but traditionally, these assets do not yield any return, often only incurring storage costs. However, with the introduction of Monetary Metals, investors have the opportunity to make their physical metals work for them. The platform enables gold and silver owners to earn yields expressed in physical ounces, offering returns of up to 5% in the Precious Metals program and 12% for accredited investors in current offerings. This innovative approach allows for the compounding of metal holdings over time, addressing the downside of stagnant investments in precious metals.
Challenges in Trading China
Navigating the Chinese market has become increasingly complex due to fluctuating trends and unpredictable press releases that can instantly shift market sentiment. Recent events have contributed to frustration among traders as it was difficult to rely on a steady trend. The podcast exemplifies this challenge, noting that even minor announcements can cause dramatic market shifts, leaving investors in a state of uncertainty. Understanding the intricacies of the Chinese governmental structure is crucial, especially in light of the recent NPCSC meeting and its implications for local government funding.
Concerns Over Non-Farm Payrolls
The discussion around U.S. non-farm payroll numbers revealed significant disappointments, with job creation falling short of expectations, despite forecasting around 100,000 new jobs. Various factors, including weather events and strikes, contributed to this underperformance, prompting questions about the reliability of these reports. The response from the bond market to these economic indicators was also perplexing, indicating a potential disconnect between weak job numbers and rising treasury yields. A looming concern is whether the Federal Reserve will pivot its strategies to manage impending pressure in the labor market.
Implications of Central Bank Policies
Central banks' liquidity measures are under scrutiny as ongoing quantitative tightening raises concerns among investors and analysts. Discussions highlight the urgency for central banks to address liquidity shortages before they create further market disruptions. The podcast suggests that we are approaching a critical junction, where inaction could lead to heightened volatility in financial markets, particularly in bonds and equities. There is a collective expectation among commentators that central banks, particularly in the U.S. and the Eurozone, may soon need to adjust their policies to ensure stability.
As the election looms we take a closer look at the bond market in the aftermath of an abysmal jobs report on Friday. We also preview Fed and BoE meetings and Chinese stimulus news.
Monetary Metals pays a yield on gold and silver in physical ounces of metal, with free storage and insurance. Right now, you can earn 2-5% on gold, paid in gold, and up to 12% annually on silver, paid in silver, in their latest offerings. Go to www.realvision.com/metals for more information.
Check out the episode on youtube to see the graphs & videos we look at.
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Host: Andreas Steno & Mikkel Rosenvold
Find our Crypto coverage here - https://stenoresearch.com/category/crypto-moves/
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