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Remember falling yields?

Financial markets are mostly focused on one story only. Falling yields was the strongest story for much of 2019, but suddenly the falling yields story stopped as yields bounced hard, and managed stopping a lot of hot money.

We are back to talking about the China/US deal but very few speak about yields these days.

German 10-year yield has been in retracement ever since we hit the negative trend line two weeks ago. German yields are back to trading at negative 0.58% again! Given the fact the yield narrative is not that alive at the moment, I think you should keep an extra eye on it, as people can suddenly start focusing on yields again.

US 10-year yield has retraced practically the entire squeeze move and we are back to trading close to the 1.5% level. This is a huge level to watch. The yields story is not in focus, but should we see the US 10-year yield start trading below the 1.5% I expect the yield story to regain focus quickly. Watch the huge 1.5% area.

Many were “devastated” as they missed the sharp squeeze in stuff like beaten and hated Deutsche Bank. Feel no sorrow as the bank is almost back to catastrophic lows again. Price action in DBK since September has been very volatile. When moves become this volatile, be sure to adjust positions accordingly. The big support is down closer to 6, but there is some support area coming in around these levels.

Below chart shows the German 10-year yield versus DBK. The same “pattern” can be seen if you overlay the European banks index.

Gold has lost some of the recent bullish sentiment, but do not forget, gold is partly a function of yields. While US 10 year basically trades at lows, gold is still down some 50 USD from highs in late August.