Today, we will discuss U.S. Treasuries. There have been many recent updates regarding U.S. Treasuries, including Japan's interest rate decision, the U.S. FMC meeting, the ADP private employment data, and the JOLTS employment data. Additionally, various economic indicators, such as the ISM manufacturing index, have been released. I wanted to provide you with these updates, so I decided to make this video.

Recently, the prices of U.S. Treasuries have been continuously rising. Even while filming this video, the yield on the 10-year U.S. Treasury has fallen below 4%. This indicates that the prices of U.S. Treasuries are consistently increasing. Therefore, let's take a closer look at how U.S. Treasury prices are changing today. First, regarding the U.S. 30-year Treasury bond index, the stock prices are...

Recently, we have been seeing a steady upward trend. There have been some drops in between, often due to factors like Trump trading, but overall, it has been consistently rising in the long term. Recently, the moving averages have shown a continuous upward movement. The same goes for the TT stock price, as well as TLT and the US 30-year Treasury bonds, which are moving in a similar manner. It would be good to observe that they are moving in unison. I also mentioned in the last video that the Rise US 30-year Treasury bond products, which are hedged against the Japanese yen and listed on the Japanese stock market, have also been rising. This is partly because the Japanese yen has recently rebounded.

I think it would be good to take a bit of interest in this. Overall, we can see that everyone is showing an upward trend. Naturally, U.S. Treasury bonds listed on the Japanese stock market are also continuing to rise. This is probably code-named 26 or 21. It is also showing a fairly positive trend. The main reason for the rise in U.S. Treasury prices is that U.S. interest rates are falling. It really seems like we might be testing the previous low points again, as they are dropping very rapidly. The decline in U.S. Treasury yields indicates that the economic situation in the U.S. is not very good, and employment is significantly slowing down. The yield on the 10-year U.S. Treasury bond reached about 4.7%.

Recently, we have seen a decline below 4%. Let's take it step by step and discuss what economic data has been released. First of all, there was the FMC meeting. This was the FMC speech released on July 31st. Compared to the previous FMC speech, certain parts are highlighted in red and have been changed. For example, remains has been changed to laid, and distraught has been changed to some. To interpret this briefly, it indicates that inflation is significantly slowing down, employment is cooling off, and the economy is decelerating, suggesting that interest rates may need to be lowered. This can be interpreted as a very dovish stance.

There was a point that was actually important here. It was about what to do with the interest rates in September. However, in the speech, it didn't explicitly state what would be done. This was because in the past, when Chairman Powell said that inflation was temporary, it caused a lot of confusion. Therefore, this time, the speech did not clearly indicate that interest rates would be lowered in September. However, while the speech did not mention this, during the press conference, he made some rather dovish comments. In the press conference, Chairman Powell stated that there is room to start lowering interest rates and that discussions could begin as early as September.

I had a conversation about the fact that the timing is close, which reflects the Federal Reserve's perception. They also positively evaluate the inflation indicators. They mentioned that they do not want additional employment slowdowns, so it seems likely that they could lower interest rates in September, as stated in the press conference. Consequently, U.S. interest rates have fallen in this manner. Additionally, there was another important economic data point besides the FOMC, which was the Bank of Japan's interest rate decision. This time, contrary to expectations, the Bank of Japan raised interest rates. Previously, the benchmark interest rate was at 0.1%, and it has now increased to 0.25%. Japan had been in a negative interest rate environment for a long time, and they had previously raised it to 0.1%. This time, they raised it to 0.25%, which I see as very aggressive. Personally, I had expected that if they were to raise it, it would only be by 0.1%, but it was not 0.1%.

They raised it by 0.15%, so I felt that it was quite aggressive, more than I expected. They are implementing a very aggressive monetary policy. Additionally, the Bank of Japan mentioned that they would not only raise interest rates but also reduce bond purchases. If you look at the details, from August to September 2014, they planned to purchase about 5.3 trillion yen worth of bonds. Over time, this amount has continued to decrease. For bonds maturing from October to December, the amount is 4.9 trillion yen, and for January to March of next year, it is 4.5 trillion yen. For April to June of next year, it is 4.1 trillion yen, and it continues to decrease, so in the first quarter of 2016, they plan to purchase about 2.9 trillion yen worth of Japanese government bonds.

I talked about it. It’s almost halved compared to now. This means that Japan is continuously implementing the YCC policy while blindly buying Japanese government bonds. They have been suppressing the rise of Japanese government bond yields, but now they are saying they will reduce the scale. In a way, this can be thought of as tapering quantitative easing. They are saying they will implement a tightening policy. Naturally, this will lead to a drop in the N dollar exchange rate. A decrease in the N dollar exchange rate means that the value of the US dollar is falling, and conversely, the Japanese yen is strengthening. It’s quite funny that the US is lowering interest rates while Japan is raising them. It’s a rather unusual event happening simultaneously.

I woke up to see that the yen to dollar exchange rate, which was originally passing 162 yen, has now sharply dropped to 150 yen. When the yen to dollar exchange rate falls like this, what happens? Naturally, U.S. interest rates could also decrease. This is because when the yen to dollar exchange rate rises, the Japanese central bank has no choice but to sell off U.S. Treasury bonds to prevent the yen from appreciating. Treasury Secretary Janet Yellen has therefore had to issue very cautionary statements to the Japanese finance minister, warning them not to intervene recklessly in the foreign exchange market. This is because if they sell U.S. Treasury bonds, U.S. interest rates will rise. With the November elections approaching, this situation can become quite uncomfortable. However, naturally, the dollar...

If the exchange rate falls, then there is no need to sell U.S. Treasuries like that. This could be a factor that allows U.S. interest rates to drop a little more. Overall, I think we can interpret the recently announced FOMC meeting and the Bank of Japan's interest rate decision very positively. This is reflected in the current dollar exchange rate. At this point, it's also interesting that the U.S. 10-year Treasury yield, which is the interest rate for 10-year bonds, has typically moved in tandem with it. This is because U.S. and Japanese inflation rates have tended to rise together. Japan's inflation is also gradually increasing. For a long time, over the past 20 to 30 years, there has been a deflationary phenomenon, but recently, Japan is also starting to worry about inflation.

일본의 물가도 많이 올랐기 때문에 일본 채권 금리도 올랐습니다. 그런데 최근 들어 일본 채권 금리는 올라가고 있지만, 미국 채권 금리는 떨어지고 있는 모습을 보이고 있습니다. 즉, 일본의 경우는 기준 금리를 인상할 것이라고 시장에서 보고 있는 반면, 미국은 기준 금리를 떨어뜨릴 것이라고 해석하고 있습니다. 현재 굉장히 이례적인 현상이 일어나고 있다고 볼 수 있습니다. 어찌 보면 미국 채권에 투자하고 있는 분들에게는 긍정적으로 해석할 수 있는 상황입니다. 더군다나 미국 채권보다 조금 더 공격적으로 투자하고 싶다면, 일본이 금리를 올리고 있기 때문에 엔 달러 환율이 떨어지고 있고, 엔화 강세가 일어나고 있습니다.

If you invest in this, it would be the Japanese listed US bonds and the Rise US 30-year international active fund listed in our country. The exposure to international yen seems to have a steeper increase. Even just by looking at it, it appears to be more pronounced. However, investing in this is somewhat challenging because you need to consider both your own situation and that of the US. For those who are a bit more confident, I think it would be good to take a look at this. 

Anyway, the yen-dollar exchange rate is currently falling, and in fact, it started to decline from around July 11. When was July 11? It was the day the US CPI index was announced, specifically the June CPI index.

At that point, the CPI index was announced very positively for those investing in the U.S., as it indicated that prices were falling, which could lead to a decrease in interest rates. This was interpreted as a very favorable announcement. Coinciding with this, the dollar exchange rate began to drop. Therefore, regardless of the recent announcements from the FMOC, the Bank of Japan, or the ADP private employment report, many interpret that the direction of U.S. Treasury bonds had already been determined long before. Personally, I have been quite aggressive in my statements since that time. I mentioned that I was aggressively buying U.S. bonds. In fact, I even said in the thumbnail, I told you to buy, and although I received a lot of criticism for it, I was actually looking at the data very closely.

It is true that I spoke aggressively. In fact, even while U.S. interest rates were falling, I bought a lot. But anyway, so far, the direction has been correct. In any case, it is moving in this way, and it shows that it is accelerating a bit, which is indicated by the fact that carry trades are being liquidated. Originally, carry trades were popular due to the interest rate difference between the U.S. and Japan. However, recently, the interest rate gap has been narrowing. The narrowing of the interest rate gap means that, because Japan's interest rates have been low, many assets were invested by borrowing Japanese yen to invest in the U.S. or emerging markets. If the yen rises significantly, people will...

Investors are liquidating their investments in emerging assets and planning to return to the yen. This is because if the yen strengthens, they will have borrowed yen, and thus they will need to repay at a higher cost. Consequently, assets that were invested in the U.S. or emerging markets will have to be liquidated, allowing them to reinvest in yen. If they do reinvest, it means the yen carry trade is being unwound, which could potentially be a factor in strengthening the yen again. At the same time, the CFTC data shows that the futures positions against the Japanese yen, which were previously in a negative or net short position, have recently seen a significant reduction in that net short position. The entities that were short selling are now starting to cover their positions to some extent.

There is a possibility that short covering could lead to a stronger yen. If the yen strengthens, it is natural that U.S. interest rates could fall. I just mentioned this, but I had expected that even if the Bank of Japan raised interest rates, it would only be by 0.1%. However, the decision was more aggressive than I anticipated. This was largely due to the fact that the Japanese Prime Minister's decision is set for September 20. This is essentially a decision by the Prime Minister, as the ruling party has consistently supported the Prime Minister. So, there isn't much time left for Prime Minister Kishida.

Currently, the approval rating is very low, and considering that, I think it has become quite urgent. Even the second-in-command of the Liberal Democratic Party has mentioned that interest rates need to be raised immediately, which makes me feel that the Bank of Japan had no choice but to raise interest rates. The reason for this necessity is that Japan's wage growth rate is almost stagnant; while prices are rising, wages are not. Right now, it's around 0%, and it has barely increased at all. It's been about 30 years since this situation began. Given these circumstances, I believe the approval rating has hit rock bottom, which leads to the conclusion that raising interest rates was unavoidable. However, on the other hand, the government debt is so high that the interest costs are indeed substantial. It has been said that nearly 25% of Japan's tax revenue goes towards interest payments, so if interest rates rise...

The increase in interest rates will likely become a greater burden. So, Japan is currently facing a comprehensive crisis, but I need to focus on my own survival first. The prime ministerial election is just around the corner, which is why we are seeing an increase in interest rates. This could potentially be a factor that leads to a decrease in U.S. interest rates. Now, I will gradually discuss the economic data. Overall, I can say that the results are very, very positive. For those investing in the U.S., the data looks very good. You might ask what is good about it when looking at the job openings and labor turnover survey, which shows higher numbers than expected. I will explain this in more detail later, but at first glance, it appears to be higher than the forecast, although we need to examine the details closely.

In the private sector, there are terms like recruitment, employment, job change, and voluntary resignation. Anyway, data on these topics has been released, detailing how they relate to manufacturing or government employment disruptions. Every time new economic data is announced, I provide updates. So, I will continue to keep you informed about how these announcements are made, and I think it would be good for you to take a look at it. I will discuss it further later.

First of all, regarding the Job Openings and Labor Turnover Survey (JOLTS), the predictions were high, but when we look at the details, we can confirm that employment is cooling down. Overall, it is true that there is a continuous cooling trend. Additionally, the Employment Cost Index (ECI) in the U.S. was lower than the predicted figure this time. Originally, the ECI for the last first quarter...

I was a bit scared and worried when it suddenly went up like this, but now it has been confirmed that it is falling again. This has become a factor in lowering interest rates. By the way, the ECI index is something the Federal Reserve is paying close attention to. In 2022, the decisive factor for raising interest rates was the ECI index. At that time, as the ECI index was rising, there was talk about needing to raise interest rates. The ECI index is currently considered important data by the Federal Reserve, but recently we have been seeing a continuous slowdown in its performance. I will discuss the detailed data later. Additionally, the ADP employment figures have also been coming in lower than expected recently, and this trend has been observed in May, June, and July as well. Overall, we can confirm that there is a continuous slowdown. Furthermore, the number of new unemployment claims has also come in below expectations this time.

Compared to previous data, it has come out high. Overall, we can see that it is continuously rising little by little. This is not just for new housing starts; the number of continuing unemployment claims is also similar. It has come out higher than the forecast, indicating that employment is slowing down. We can confirm that it is continuously rising. Overall, we can see that employment is indeed slowing down. 

Additionally, the unit labor costs in the U.S. have shown a significant drop compared to the forecast. On May 2nd, when the first-quarter data was announced, there was a sudden spike, but excluding that, we can see that it has been continuously decreasing. Recently, we can also observe a rapid slowdown. 

Furthermore, U.S. non-farm productivity has come out higher than expected this time. As productivity increases, wages tend to rise as well.

The burden can decrease, so the higher it is, the better it is. In May and June, there was a sudden drop in the predicted area, but we are seeing it rise again, so I think we can interpret this positively. Currently, the manufacturing purchasing managers' index announced by S&P Global has come out higher than the forecast. However, we pay more attention to S&P Global because it is a traditional index with much more data. In the forecast period, the ISM manufacturing purchasing managers' index came out lower, indicating that the economy is slowing down significantly. A reading of 46.8 means that the slowdown is quite severe. The baseline is 50, and since it is below 50, the economy has been slowing down considerably.

However, this time, the 46.8 is really showing a significant slowdown. I will show you the data later. The ISM Manufacturing Purchasing Managers' Index had been continuously decreasing and was moving sideways, but recently, it has suddenly started to drop. Lately, it has been consistently worse than the forecast, indicating that the economy is slowing down. However, the situation with S&P Global is a bit ambiguous. The data we are looking at is somewhat different. Generally, the ISM Manufacturing Index is traditionally the one that is closely monitored, but the S&P Global Index is also important. In their case, the ISM is showing a slowdown, while the S&P Global is somewhat increasing. This suggests that the economy is not completely collapsing. However, when looking at employment data and cost indices, it seems that the economy is still...

It seems that dying is indeed a possibility, but it's not a complete stagnation. I think there could be factors that might gradually lower U.S. Treasury yields. The data from the Fed Watch is quite dramatic. There has been an increase in bets that the interest rates will definitely be lowered in September. Currently, the benchmark interest rate is at 5.5%, but there is no range between 5.5% and 5.75%. Market participants are predicting a 100% certainty of a rate cut. They believe that the FOMC will definitely lower rates in November and again in December, continuously reducing rates by 0.25%. The data suggests that rates will keep being lowered by 0.25% until April of next year, at which point the benchmark interest rate will be around 4%, down from the current 5.5%.

About eight months from now, it is predicted that the interest rate will drop by 1.5%. This is quite positive. The recent job data, as you have seen earlier, came out higher than expected. However, let me go over the detailed data. I always mention how this data compares to the predictions, but it's not just that; I also look at government data, private sector data, and specifically how employment, retirements, and job changes are overall. The data is from the job openings report. Looking at the job openings data, there was a total decrease of 46,000 positions. Originally, in May 2014, there were 823,000 job openings, but that has now decreased to 784,000, which is a reduction of 46,000. However, since it came out higher than expected, this is a bit...

I think there could be factors that could lead to an increase in interest rates, but if you look at it in more detail, there is a total price line that includes the private sector and the government sector. As you might expect, the part that is most closely related to the economy is the private sector. The government sector, on the other hand, consists of civil servants who operate independently of the economic situation; they just flow steadily or remain constant. However, if the private sector is affected, it indicates that the economy is slowing down significantly. Although there was a reduction of 46,000 jobs, if you look closely, you can feel that private sector data has decreased considerably. There has been a reduction of 100,000 jobs. Among the private sector, the area that has seen the most significant decline is manufacturing. The manufacturing sector is the most sensitive to economic conditions. As you saw earlier, the ISM manufacturing index has also dropped significantly, confirming the data on employment.

We can confirm that we can learn from the data. This is the hiring data. In terms of hiring data, there has been a decrease of 310,000 people. However, we can also see that hiring is slowing down significantly. The employment rate, which was originally maintained at 3.8% and 3.6%, has also decreased this time, which can be interpreted positively. Among the reductions in employment, it can be confirmed that the private sector has seen a significant decrease. This indicates that hiring data is indeed slowing down. Additionally, this is about voluntary resignations. Voluntary resignations can indicate confidence. If currently employed individuals are able to resign voluntarily, it can be interpreted that they have a lot of confidence. However, voluntary...

Recently, voluntary resignations have not been occurring, with a decrease of 121,000 people. This means that people are not resigning voluntarily because employment is slowing down and the employment data is poor. Therefore, they cannot resign voluntarily due to the slowdown in employment. Looking at the figures, it was 2.4, 2.2, 2.2, and 2.1, and now it has remained at 2.1, indicating that it is unable to rise further. Moreover, we can see that the private sector is experiencing an even greater decline. It has been continuously decreasing. In fact, this time, there was another decrease of 60,000 in the private sector. When we look at these figures, it is clear that while the overall employment data is higher than expected, if we examine the details, such as job openings, hiring, and voluntary resignations, we can see a different picture.

We can see that things are getting worse and this is the ECI index. As I mentioned, the ECI, or Employment Cost Index, has come out worse than expected. In fact, it has come out much worse than the forecast. While it looked bad on the surface, it is even worse in detail. If I show you the data, you can see that this is Vermont, and this is private sector bidding. What has decreased this time? It is the private industry. This indicates that the economy is slowing down significantly. Because of this kind of data, we can confirm that interest rates are falling. It's not just about how much it came out compared to the forecast; relatively speaking, it is showing this kind of trend.

We can confirm that, in the case of the ADP private employment data, the predictions were not favorable this time. However, we can also note that Nela Richardson, the chief economist at ADP, stated that wage growth is slowing down and that the labor market is aligning with the Federal Reserve's efforts to curb inflation. It is being confirmed that labor is indeed slowing down significantly, even from the private sector's perspective. Furthermore, if inflation rises again, it will not be due to the labor market. Labor cannot drive inflation back up; it is indeed slowing down considerably, as confirmed by the ADP private employment data. Therefore, when looking at the recent FOMC and BO rate decisions, as well as various employment data, ADP private employment data, EC data, and the ISM manufacturing index, it is clear that there is a definite slowdown.

You should check the data, and today, the announcement will be made at 9:30 PM. You need to look at the Vino Public Index and the unemployment rate. However, based on the data released so far, I have a feeling that it might not look good. But this is just a prediction, and you should verify how it actually turns out. If the numbers are high, interest rates could definitely rise a bit. However, from a long-term perspective, I expect that interest rates will continue to drop in September, and the yield on government bonds will also decrease. But this is just my opinion; I am not forcing this view on you. In any case, you should check the data, and I will discuss this further in relation to U.S. bonds later.

I will mention this again when I upload the video. Also, an important point is that there will be interest rate decisions on September 17th to 18th, November 6th to 7th, and December 17th to 18th. I expect that the interest rates might be lowered during these times, but I will show you how this will turn out later. 

For those investing in the U.S., this is also something important to keep an eye on. Currently, there is a lot of turmoil in the Middle East. The leader of Hamas, Haniyeh, was assassinated in Iran, which raises concerns about escalating tensions between Israel, Iran, Hezbollah, and Hamas. If oil prices rise, this could also be a factor that leads to an increase in interest rates. However, as of now, oil prices are not rising significantly.

The economy is not rising much because it is slowing down. Even with geopolitical risks, inflation is not significantly affected at the moment. I recommend keeping this in mind. This shows how interest rates are currently behaving in Canada, Europe, including France and Germany, the United States, South Korea, and Japan. The UK has recently lowered its interest rates, but this has not yet been updated. As you can see, Canada, Europe, and the UK are lowering their interest rates. The United States is also indicating that it will lower its rates, and South Korea is expected to do the same. In contrast, Japan is raising its interest rates while other countries are lowering theirs, and China has also lowered its rates recently.

Brazil is also lowering interest rates, and looking at these developments, it's quite fascinating. We need to keep an eye on how things will unfold. The interest rates on Japanese government bonds are rising, while U.S. Treasury yields are falling, and the exchange rate of the dollar is decreasing. This is all very intriguing. Considering these factors, I will continue to discuss how the U.S. economy will evolve in future videos. I hope today's video has been somewhat helpful. Thank you.

미국채 투자, 금리가 하락해도 내가 계속 사고있는 이유 (ft. ACE미국30년국채액티브, TLT, TMF)

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