Yesterday, U.S. bonds ushered in a wonderful wave of decline. Several Fed officials then had to speak to appease the market and pointed out that there is a possibility of slowing down the pace of interest rate hikes in the future. UBS, a large international investment bank, furth

Yesterday, US bond ushered in a wonderful decline.

Then Fed several officials had to speak to appease the market and pointed out that there is a possibility of slowing down the pace of interest rate hikes in the future.

International large investment bank UBS further pointed out that the Fed may have to stop tightening in mid-2023.

Then, European stock markets rebounded and US stock markets rose sharply.

01

Here we need to clarify a misunderstanding first.

Regarding US bonds, the news that people often see is the rise in US bond yields, which can easily be misleading. It is believed that US bonds are rising, but in fact, the rise in US bond yields means that investors who have previously purchased US bonds are suffering losses from the falling US bond prices.

This is actually the same as the dividend yield. The dividends of a certain stock have not changed, but the lower the stock price, the higher the dividend yield will be.

So when we see bond yields for various maturities in the US Treasury market yesterday, breaking through the previous highs, and even returning to the highs in the second half of 2007, setting a 15-year record, we should realize that there has been another wave of panic selling in the US Treasury market, causing prices to continue to fall.

By 20:00 Beijing time last night, the yield on the US two-year Treasury bond exceeded 4.6%, and the yield on the ten-year Treasury bond, which was anchored by the asset price pricing, also exceeded 4.3%.

An ETF that can reflect the price trend of US Treasury bonds has also fallen by more than 18% since the beginning of the year.

02

Not only does the ETF share of US bonds continue to decrease, funds continue to flow out. The data released by the Federal Reserve in mid-October also shows that in the past four weeks, central banks are accelerating their pace to escape US bonds.

In the data, central banks of various countries sold a total of US$52 billion in U.S. bonds in the first three weeks, with an average weekly sales of US$13 billion, but the sales reached US$29 billion in the last week.

can be seen that central banks are selling US bonds at a faster rate, which is also one of the reasons for the accelerated decline in US bond prices.

Perhaps by the time the updated data is released in early November, we will see that this type of pedaling escape will be even larger.

03

Last night, Daly, a Fed official, said that the Fed will pay attention to market risks and may consider slowing down the pace of interest rate hikes.

Similar dovish voices have begun to sound recently, which also shows that the Fed has realized that fierce austerity policies may cause a more serious hard landing.

The report released by UBS strategists also pointed out that the current total debt of the United States has reached 31.1 trillion yuan, which is only one step away from the statutory upper limit of 34 trillion yuan.

and the current monetary policy has also had a worse impact on the market.

Therefore, it is expected that the Federal Reserve will stop deduction of by mid-2023 and slowly stop the monetary tightening policy.

04

In response to this, the stock market immediately responded positively. European stocks, which were falling at the time, rebounded after 21:00 Beijing time last night.

Then the US stock market opened at 21:30 Beijing time, and also launched a good wave of rises. In the end, the three major U.S. indexes all rose to 2.3%~2.5%.

Among the major industries ETFs, the financial industry rose by 3%, and even the Internet Stock Index ETF, which had the smallest increase, rose by 1.2%.

A batch of technology stocks 's performance data of Netflix is not ideal, but it still rose 8% last night. In addition, Apple Microsoft rose by more than 2%, and Amazon rose by more than 3%.

Nasdaq China Golden Dragon Index rose 1.1%, but it fell 1.8% throughout the week. Judging from this week, the trend of Chinese stocks listed in the US is obviously weaker than the trend of US stocks .

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