Undervalued Assets

Featured daily in @TheTradeXchange.

Six reports per week. Highlighting increasing distortions in markets. Debt & Leverage Supercycle → Commodities Supercycle

[QE Infinity @StealthQE4]

So bond futures opened and the 10 year hasn’t moved.

Not good after Bessent’s launched a Bazooka Saturday reducing the number of long dated Treasury auctions.

The only option left is Fed QE and inflation is too high to try that.

Running out of options. 💀

[Global Markets Investor @GlobalMktObserv]

Forced unwind is intensifying across long-dated US Treasuries:

Asset managers cut bullish positions in ultra-long Treasury futures by $27 million per basis point of interest-rate risk in the 2 weeks ending October 6th.

This is equivalent to ~$38 billion in current 10-year Treasury notes.

Meanwhile, 30-year Treasury yields surged to a 24-year high of 5.72% last week, as futures prices fell sharply amid persistent inflation concerns, worsening government finances and massive AI-related investment.

Open interest in ultra-long Treasury futures has declined for 7 consecutive sessions, shedding nearly $20 million per basis point of risk, providing further evidence of investors unwinding positions.

The unwind is driven by rising yields and technical factors in Treasury futures. When the cheapest bond eligible for delivery under a Treasury futures contract shifts to a longer-maturity bond, asset managers can end up with greater interest-rate exposure than intended, forcing them to sell futures to reduce that risk.

Rising yields are triggering further investor deleveraging, adding to the pressure on the world's largest bond market.

[Barchart @Barchart]

JUST IN 🚨: U.S. Dollar Index $DXY hits highest level in 1.5 years 📈 📈

[Lukas Ekwueme @ekwufinance]

Commodities relative to M2 are at historic lows.

Money supply has grown far faster than commodity prices over the past decade despite years of underinvestment.

Meanwhile we've entered a new inflationary regime.

During the last inflationary cycle in the 70s, commodities were the best performing asset class.

I expect history to rhyme.

[Douglas Macgregor @DougAMacgregor]

BREAKING: US Power Grid emergency declared in Washington D.C and 13 other States, blackouts imminent.

[Watcher.Guru @WatcherGuru]

JUST IN: 🇰🇷 South Korea's KOSPI stock market crashes 6%.

[Global Markets Investor @GlobalMktObserv]

Physical oil prices have reached UNPRECEDENTED levels as the global scramble for crude intensifies:

Dated Brent, the price of physical crude for near-term delivery, surged above $154 per barrel on October 5th, the highest level in LSEG data going back to 1991, and remained above $149 last Friday.

In effect, the spread between physical Brent and benchmark Brent futures has widened to a record of more than $50 per barrel, highlighting the growing premium buyers are willing to pay to secure immediate supply.

Normally, longer-dated crude futures trade at higher prices because of storage costs and other factors, but the current supply squeeze has reversed this pattern, making near-term oil more expensive than future deliveries.

The squeeze is intensifying as crude inventories shrink, tanker availability remains low, and shipping through the Strait of Hormuz remains dangerous, with winter approaching and demand for heating fuels rising.

At the same time, Brent futures have risen far less than physical prices, reflecting expectations that oil flows through the Strait will eventually recover.

Meanwhile, intensified Iranian attacks are making these shipments increasingly difficult to secure, while rerouting cargoes and securing tankers add further costs and delays.

The global oil market is facing a historic supply squeeze.

[Barchart @Barchart]

U.S. Treasury to cut bond sales and issue more treasury bills beginning next month 🚨

[Bull Theory @BullTheoryio]

BREAKING: Call options on the 20+ Year Treasury Bond ETF ($TLT) just hit a record high of 14.9M contracts in one month.

Traders are betting that long term bond yields are about to fall and bond prices will rise.

This comes after TLT fell 9% in Q3 and the 30-year yield reached its highest level in 24 years.

[Jason Lewris @jasonlewris]

Americans are dumping their vacation homes right now.

In September, for every vacation home purchased, 2 were being sold.

This rate of vacation home dumping has held constant since May.

[Barchart @Barchart]

Hedge Funds dumped Financial Stocks last week at the fastest pace since March 📉 📉

[Barchart @Barchart]

Silver - It's Now or Never 🚨

[Barchart @Barchart]

20% of Families have fallen behind on loan payments, the highest level since the run-up to the Global Financial Crisis 🚨🚨

[Common Sense Investor (CSI) @commonsenseplay]

$TLT call option volume soars to the highest level in history!

$TLT short interest soars to the highest level in history!

You know what comes next!

[Francis Hunt - The Market Sniper, CMT (MBA) @themarketsniper]

To the Gold reval guys. If Judy Sheldon concludes that China has more AU than the US [They do].
The US would make China stronger than themselves in a revaluation scenario. Therefore it is unlikely to happen, apart from a final act of desperation to extends its fiat/debt system when in death throes for a few more weeks.

[Gold Telegraph ⚡ @GoldTelegraph]

BREAKING NEWS

RUSSIAN GOLD IS POURING INTO HONG KONG AT A RECORD PACE

A new gold market is being built...

[Martin A. Armstrong @ArmstrongEcon]

I think gold should come down into October, and it looks like a buying opportunity. Gold usually rises in a geopolitical crisis. When people think it’s all over, Iran is defeated, ‘Why do I need gold?’ Then you get the correction.

The fat lady hasn’t sung yet. Gold will go up because you’re looking at war on so many fronts.

[QE Infinity @StealthQE4]

Curious to see how yields trade Monday.

You’d think they’d drop. Let me rephrase that:

They better drop.

You can only sell so many t-bills though.

This is big news.

[Barchart @Barchart]

Chinese bank loans are contracting at the fastest pace in history 🤯 👀

[Martin A. Armstrong @ArmstrongEcon]

You go to one of our conferences, there’s probably over $10 trillion in the room. I know the biggest funds in the world. They’ve been buying equities, real estate.

This is why the Dow has continued higher.

For the last year and a half, they’ve been swearing it’s going to be the biggest crash in 150 years. It kept going up because big foreign capital buys the Dow.