2015.08.04 Daily

I planned to increase duration position in the global aggregate fund in this week with the expectation that the yield could increase pass-through bought due to portfolio adjustment in end of last month. Contrary to my hope, US treasury rates were down further last night as economic indicators showed mixed signal about fundamentals. Shout I have bought bonds last night? It’s somewhat difficult question because current rates seem very low level. In fact, the 10 year treasury rate was down to the level seemed significant, cross spot of 120MA and 200MA. In addition, its lag span met three points at the same time, which was 60MA, 120MA and the top of positive cloud.

Current rates must be critical level with these perspectives. So, if current bond market is in range movement, the bond yield would robust tonight. I see the global market as the procedure of convergence toward its one point with preparing to make a new big trend. It would continue until 3Q this year, I guess, so the timing of buying bonds should be delayed on this low level. Oil price tumbled yesterday further as Brent oil price declined toward under 50 dollar per barrel. The expectation of inflationary pressure started to deteriorate rapidly and this concern has been influenced in recent flattening bond market. But, oil price is nearby last trough, so we expect short-term rebound from this number and if then, the oil market means the range movement, either. BDI increased yesterday further, although Chinese manufacturing PMI data was very disappointed. Main analysts in this market argue recent rebound of BDI would continue for some period, but they see the only short-term bullish market with the seasonal effect in summer from agricultures and pacific areas. This sounds almost reasonable, but the momentum to increase seems too strong.

If 10 year US treasury yield is down under current critical level, the possibility of short-term trend to bull market would increase. Nevertheless, there are some hurdles in the chart, and the yield should rebound to meet this critical level at last. The problem is that we do not know when the yield re-meets that level. So, if the yield is lower than current level, I would be very frustrated and I have to buy some bonds to add duration. If not, hopefully, I will earn some time to think about an adequate level to buy.