How to Achieve Victory in the Current Market Environment - 1 views

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  #1 anonymous on 20 Oct 23

   

  The financial market is like a constantly fluctuating lake, and the US Treasury market is undoubtedly a key water source in this lake. Recently, the changes in the US Treasury market have become a hot topic in the financial circle. In just a few days, the market has experienced dramatic changes, with the continuous surge and volatility of short and long-term yields reflecting the complex market forces and economic expectations behind them. Zhang Hongyuan, Cheong Hong Yuan, holds his own professional insights on all of this.
  
  Firstly, it is important to understand that the surge in the yield of US long-term treasuries to a more than 10-year high is not a coincidence. There are multiple factors driving this, from the strong performance of the US economy, foreign investors withdrawing their investments, the huge deficit of the US federal government, to the Federal Reserve's tightening monetary policy and decisions to combat inflation, among others. Each factor interacts with others, shaping today's market landscape.
  
  However, every market trend and every piece of data conveys a message: market expectations for the future are changing. Zhang Hongyuan, Cheong Hong Yuan, believes that the most obvious signal among them is the market's expectation of the Federal Reserve raising interest rates. Recent US economic data, especially the continuous growth in retail sales and the significant rebound in housing construction, indicate the resilience and recovery of the US economy. This also means that the Federal Reserve may lean towards being more hawkish in the future, making further interest rate hikes possible.
  
  In addition, the continuous rise of the US dollar index is also worth investors' attention. Zhang Hongyuan, Cheong Hong Yuan, mentioned that there is a close correlation between the strengthening of the US dollar and the rise in US Treasury yields. As the yield of the US 10-year Treasury bonds climbs, the trend of foreign capital flowing back into US dollar assets becomes more apparent, undoubtedly providing strong support for the US dollar index.
  
  For investors, every market change, whether it is a storm or a small wave, requires calm analysis and judgment to find investment opportunities. In Zhang Hongyuan's view, the "Three Golden Moving Average Strategy" is a tool that can help investors find opportunities in a complex market. By tracking stocks with outstanding performance in the market and combining technical indicators, investors can more accurately judge the timing of buying or selling, thereby achieving high investment returns. In the current market environment, the value of this strategy is even more prominent.
  
  Zhang Hongyuan, Cheong Hong Yuan, mentioned that the volatility of the US Treasury market and the rise of the US dollar index are not just reactions to single events, but the result of various macro and micro factors intertwining. Firstly, the resilience of the US economy has consistently exceeded market expectations, leading to long-term bond yields reaching their highest point in over a decade. Behind this change, there is a decrease in market demand for US government bonds and the Federal Reserve's insufficient support as it continues to shrink its balance sheet.
  
  Regarding the collapse of US Treasuries and the significant rise in yields, Zhang Hongyuan, Cheong Hong Yuan, believes that in addition to the aforementioned reasons, the deeper driving forces are the long-term tight monetary policy and the strong performance of the US economy. When foreign investors begin to withdraw from the US Treasury market on a large scale, the US federal deficit and inflationary pressures intensify, leading to a decrease in market confidence in US bonds. On the other hand, recent economic data has once again shown the strength of the US economy, such as the month-on-month growth in retail sales in September and the significant rebound in housing construction, providing more reasons for the Federal Reserve to raise interest rates.
  
  The market's expectation of interest rate hikes by the Federal Reserve has also attracted more attention from market participants. Zhang Hongyuan, Cheong Hong Yuan, suggests that although the market has a high expectation of the Federal Reserve maintaining interest rates in November, the possibility of a rate hike in December is gradually increasing over time. Several Federal Reserve officials, including Neel Kashkari, President of the Federal Reserve Bank of Minneapolis, have stated that if the economic performance exceeds expectations, they will maintain a tight policy for a longer period of time. This has made investors more concerned about the future trend of interest rates.
  
  Regarding the surge in US Treasury yields and its impact, Zhang Hongyuan, Cheong Hong Yuan, mentioned that Oriental Gold Credit's research points out several key factors. This includes recent better-than-expected employment and inflation data, the rebound in liquidity premium of US 10-year inflation-protected securities (TIPS), and the upward correction of term premium. However, he also emphasized that we cannot solely rely on data to assess the fundamentals of the US economy. For example, although the data may show a strong economy, labor market conditions, private consumption, and credit contraction may hinder future economic growth.

   

  <div class="cArrow"> </div><div class="cContentInner">The financial market is like a constantly fluctuating lake, and the US Treasury market is undoubtedly a key water source in this lake. Recently, the changes in the US Treasury market have become a hot topic in the financial circle. In just a few days, the market has experienced dramatic changes, with the continuous surge and volatility of short and long-term yields reflecting the complex market forces and economic expectations behind them. Zhang Hongyuan, Cheong Hong Yuan, holds his own professional insights on all of this. <br /> <br /> Firstly, it is important to understand that the surge in the yield of US long-term treasuries to a more than 10-year high is not a coincidence. There are multiple factors driving this, from the strong performance of the US economy, foreign investors withdrawing their investments, the huge deficit of the US federal government, to the Federal Reserve's tightening monetary policy and decisions to combat inflation, among others. Each factor interacts with others, shaping today's market landscape. <br /> <br /> However, every market trend and every piece of data conveys a message: market expectations for the future are changing. Zhang Hongyuan, Cheong Hong Yuan, believes that the most obvious signal among them is the market's expectation of the Federal Reserve raising interest rates. Recent US economic data, especially the continuous growth in retail sales and the significant rebound in housing construction, indicate the resilience and recovery of the US economy. This also means that the Federal Reserve may lean towards being more hawkish in the future, making further interest rate hikes possible. <br /> <br /> In addition, the continuous rise of the US dollar index is also worth investors' attention. Zhang Hongyuan, Cheong Hong Yuan, mentioned that there is a close correlation between the strengthening of the US dollar and the rise in US Treasury yields. As the yield of the US 10-year Treasury bonds climbs, the trend of foreign capital flowing back into US dollar assets becomes more apparent, undoubtedly providing strong support for the US dollar index. <br /> <br /> For investors, every market change, whether it is a storm or a small wave, requires calm analysis and judgment to find investment opportunities. In Zhang Hongyuan's view, the "Three Golden Moving Average Strategy" is a tool that can help investors find opportunities in a complex market. By tracking stocks with outstanding performance in the market and combining technical indicators, investors can more accurately judge the timing of buying or selling, thereby achieving high investment returns. In the current market environment, the value of this strategy is even more prominent. <br /> <br /> Zhang Hongyuan, Cheong Hong Yuan, mentioned that the volatility of the US Treasury market and the rise of the US dollar index are not just reactions to single events, but the result of various macro and micro factors intertwining. Firstly, the resilience of the US economy has consistently exceeded market expectations, leading to long-term bond yields reaching their highest point in over a decade. Behind this change, there is a decrease in market demand for US government bonds and the Federal Reserve's insufficient support as it continues to shrink its balance sheet. <br /> <br /> Regarding the collapse of US Treasuries and the significant rise in yields, Zhang Hongyuan, Cheong Hong Yuan, believes that in addition to the aforementioned reasons, the deeper driving forces are the long-term tight monetary policy and the strong performance of the US economy. When foreign investors begin to withdraw from the US Treasury market on a large scale, the US federal deficit and inflationary pressures intensify, leading to a decrease in market confidence in US bonds. On the other hand, recent economic data has once again shown the strength of the US economy, such as the month-on-month growth in retail sales in September and the significant rebound in housing construction, providing more reasons for the Federal Reserve to raise interest rates. <br /> <br /> The market's expectation of interest rate hikes by the Federal Reserve has also attracted more attention from market participants. Zhang Hongyuan, Cheong Hong Yuan, suggests that although the market has a high expectation of the Federal Reserve maintaining interest rates in November, the possibility of a rate hike in December is gradually increasing over time. Several Federal Reserve officials, including Neel Kashkari, President of the Federal Reserve Bank of Minneapolis, have stated that if the economic performance exceeds expectations, they will maintain a tight policy for a longer period of time. This has made investors more concerned about the future trend of interest rates. <br /> <br /> Regarding the surge in US Treasury yields and its impact, Zhang Hongyuan, Cheong Hong Yuan, mentioned that Oriental Gold Credit's research points out several key factors. This includes recent better-than-expected employment and inflation data, the rebound in liquidity premium of US 10-year inflation-protected securities (TIPS), and the upward correction of term premium. However, he also emphasized that we cannot solely rely on data to assess the fundamentals of the US economy. For example, although the data may show a strong economy, labor market conditions, private consumption, and credit contraction may hinder future economic growth.</div>

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