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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs, FX or any of our other products work and whether you can afford to take the high risk of losing your money.
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SaxoStrats

Market Call Podcast

John Hardy
Head of FX Strategy
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010519 Fed M
Forex

FX Update: The path to Fed yield curve control

John Hardy
The pressure from rising yields came to at least a near-term climax yesterday with a new spectacular spike in US Treasury yields that spooked global markets and drove a general leveraging across asset classes. In FX, this meant that the strongest trends of late reversed brutally, with JPY and USD soaring and traditional risk-correlated FX and sterling suddenly hitting the skids. Now the exercise is in gauging the scale of further fallout, or when the Feed swoops to the rescue.
Bonds

SOS central banks wanted!

Althea Spinozzi
Yesterday's volatility in the bond market strengthens our belief that central banks' intervention is needed again to avoid another crisis. In the United States, the move up in yields has just started to tighten economic conditions. This week the correlation between Treasury yields and junk bond performance has turned negative, signalling that the selloff might soon leak to risky assets. In Europe, the periphery might soon face problems refinancing its debt as demand for bonds suddenly drops.
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Equities

Build me an ark as the tsunami of risk of Tesla-Bitcoin-Ark could come

Peter Garnry
This was the week when the 'tower of risk' in Tesla-Bitcoin-Ark came under pressure causing cracks in an until now unstoppable momentum trade since early March 2020. What has been a positive self-reinforcing feedback loop could suddenly turn into a tsunami of risk.
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Equities

Gaming is a long-term winning industry

Peter Garnry
Today we are launching our Gaming equity theme basket which is our sixth theme this year. The gaming industry has experienced rapid growth the past five years and we predict high growth in the coming decade, but more importantly profitable growth.
Podcast

Podcast: Treasury yield spike sends correlations towards one

Saxo Market Call
Today we delve into the enormous spike in US treasury yields yesterday, in part triggered by a weak 7-year treasury auction and how the accompanying spike in real yields finally set off an across the board deleveraging wave, dangerously sending correlations across asset markets towards one, with commodities and credit also seeing some contagion yesterday. We look through how quickly the Fed might respond from here to the situation and the ongoing danger of the "ARK-Tesla-Bitcoin" Nexus specifically. Today with Althea Spinozzi on fixed income, Peter Garnry on equities, Ole Hansen on commodities and John J. Hardy hosting and on FX.
Commodities

Commodity weekly: Rising yields a short-term threat to the commodity bull run

Ole Hansen
Weekly commodity update focusing on the potential short-term negative impact on the sector from spiking bond yields. A development that has triggered higher volatility and with that the risk of deleveraging. Commodities have enjoyed several months of increased attention and the strong momentum across many individual raw materials have led to a speculative buying frenzy. While fundamentals point to further gains over the coming months, the short-term focus may turn to profit taking and deleveraging.
Macro

Market Quick Take - February 26, 2021

Saxo Strategy Team
US Treasury yields spiked aggressively higher yesterday in the wake of record weak demand for 7-year treasuries at an auction, wiping out risk sentiment and sending global equities into a new and more profound and global spiral lower. Sentiment was sufficiently shaken this time to also trigger unease and selling in commodities markets, and the US dollar rose steeply across the board. Fed action to ease some of the technical reasons behind the rout likely forthcoming in a matter of days.
Bonds

It's not reflation; it’s risk-taking. But we are approaching the end of it.

Althea Spinozzi
We find that the current rise in US Treasury yields is due to risk-taking other than growing inflation expectations. Junk bonds are the best performing fixed-income securities year to date, meaning that investors are selling lower-yielding bonds and buy into junk in an effort to build a buffer against rising interest rates. However, we believe the tide is turning. From this week, the correlation between junk bonds returns and US Treasury yields has turned negative. Given the recent acceleration in Treasuries selloff, we believe that 10-year yields may soon break 1.5%, aiming for a new strong resistance at 2%. The higher US yields rise, the deeper the selloff in risky assets we expect it to be.
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