T-NOTE short sellers ride profits on the back of the US political mess

Chart 1 Source: Tradingview May 10 2023 6:31 UTC

The above chart illustrates the Skilling US T-Note CFD 5 day price performance

Market Talk

Short sellers of US government debt seem to have been benefiting from the US political mess revolving around the US debt limit and fear that the US could “default” on paying its bills

What is a Treasury Note (T-Note)?

• The T-Note is a tradable U.S. government debt instrument
• US government issues T-Notes to investors in order to finance the government
• Investors who buy T-Notes are lending money to the US government
• Investors get a fixed rate of return for lending money to the government

Why are US T-notes falling?

• The US is at its debt ceiling and the government needs political approval in order to increase the debt ceiling
• Politicians in the US are pushing back on increasing the debt ceiling, and if successful, the US will be at risk of not being able to pay its bills

Bottom line: if the US debt ceiling is not increased then T-Notes will be at risk of further declines

Skilling offers T-Note CFDs

Traders at Skilling can speculate on the US debt ceiling “event”. Traders who have the view that the debt ceiling will not be increased could attempt to sell or short-sell T-Note CFDs. Traders who have the view that the debt ceiling will be increased could attempt to buy or go long T-Note CFDs.

Do you have a view on the US debt limit “event”?

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Today’s trading bullets

• US T-Note under downside pressure in the very short term (5-13 days)

T-Note (30 minute chart) current price $115.02 appears to be vulnerable for an attempt to test the lower $114.16 support level in the very short term (5-13 days). Upside risk above $115.27.

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Today’s economic calendar

US Inflation data on deck; brace for potential upside risk

• Core US inflation month on month could be higher
• A higher inflation print goes against the outlook that inflation is slowing

Asset focus:

• Gold current price appears to be holding the prevailing multi-month uptrend. Current price $ 2,028, focus is on the all time highs near $2,075 while downside risk seen below the $1,986 support
• USD/CAD vulnerable to further weakness after key support near 1.3385 fails to hold
• WTI current multi-day upside advance seems to be “corrective”. In order to keep alive the prospects for a further upside move, resistance levels near $74 and $75.80 would need to be overcome. Downside risk below $72.2 could expose $63.57

Source: TradingView / J. Knobel May 10 2023 6:27 UTC