Jul. 25 at 9:20 PM
$NIFTY50.NSE
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A comprehensive macroeconomic impact report analyzing the potential global ripple effects based on the U.S. 10-Year T-Note Futures scenarios:
📊 Macro-Economic Impact Report
By: Varun Bhargav
SEBI RA INH000014508 | Proprietor, Profit X Research™
🎯 Chart Overview
Monthly chart of U.S. 10-Year Treasury Note Futures (TYM25).
* Current Price: ~110.97
* Key Breakdown Level: 106
* Key Breakout Level: 120
This futures price inversely reflects U.S. Treasury yields:
* Futures ⬇️ = Yields ⬆️
* Futures ⬆️ = Yields ⬇️
🔻 SCENARIO 1: Breakdown Below 106 (Yields Spike Higher)
🧠 Interpretation:
A breakdown below 106 would likely push the 10-year yield above 5%, signaling:
* Loss of confidence in long-duration debt
* Sticky inflation or fear of new supply shocks
* More aggressive Fed stance or stagflation scenario
1. 📉 Global Equity Markets
* Negative Impact: Rising yields = lower equity valuations (due to higher discount rates).
* High-duration sectors (tech, growth, small caps) will correct heavily.
* Financials may outperform for a while, but eventually credit stress will dominate.
* Emerging markets suffer as capital flows to safer U.S. assets.
2. 📉 U.S. & Global Bond Market
* Yields spike globally, long-duration bonds sell off.
* Flattening or inversion intensifies, signaling economic distress.
* Potential for bond market volatility (VaR shock) akin to UK pension crisis (2022).
3. 🛢️ Commodities
* Initial negative impact due to risk-off.
* Oil: Demand fears hit crude.
* Industrial metals fall on slowdown concerns.
* Gold: May dip initially due to rising real yields, but eventually spike as a fear hedge if equity sell-off intensifies.
4. 🪙 U.S. Dollar (USD)
* USD strengthens globally:
* Higher yield differential
* Global flight to safety
* DXY (Dollar Index) could break higher.
5. 🇮🇳 Indian Rupee (INR) & EM FX
* INR depreciates sharply due to:
* Outflow of FII funds
* Higher crude
* Risk aversion
* Other EM currencies (ZAR, BRL, IDR) fall more steeply.
6. 💷 Developed Market FX
* Japanese Yen (JPY) weakens initially (rate differential), unless BoJ intervenes.
* GBP, EUR, CAD, AUD weaken vs USD.
* AUD and CAD underperform due to risk-off + commodity weakness.
7. 📉 Global Asset Classes Summary
Asset Class Impact
US Equities 🚨 Bearish
Global Equities 🔻 Bearish
Bonds (Globally) 🔻 Bearish
Commodities ⛏️ Bearish short-term
Gold 🤔 Mixed (bearish → bullish)
Dollar (USD) 💪 Stronger
INR, EM FX 🔻 Weak
JPY, GBP, EUR 🪙 Weak vs USD
🔺 SCENARIO 2: Breakout Above 120 (Yields Drop Below 4%)
🧠 Interpretation:
A breakout above 120 would signal cooling inflation, slowing economy, or Fed pivot expectations.
1. 📈 Global Equity Markets
* Positive for risk assets: Lower yields boost valuations.
* Tech and high-growth sectors rally
* Short covering and liquidity chasing risk may resume
* Momentum in global equities, especially EMs
2. 📈 Bond Market
* Global bond rally resumes
* Lower yields ease financial conditions
* Long duration debt gains
3. 🛢️ Commodities
* Oil and industrial metals rise on:
* Economic soft-landing hopes
* Demand recovery from China, EMs
* Gold surges:
* Lower real yields
* Dollar weakness
* Inflation hedge resumes
4. 💵 U.S. Dollar
* USD weakens:
* Dovish Fed = lower rate differential
* Reversal in capital flows
* Boosts EM and risk currencies
5. 🇮🇳 Indian Rupee & EM FX
* INR stabilizes or appreciates
* Lower crude
* FII inflows return
* EM FX recovers across board
* Stronger carry returns
* Risk appetite improves
6. 💱 Major Currencies
* JPY strengthens as rate differential narrows
* EUR, GBP gain vs USD
* AUD, CAD rally on commodity strength
7. 🌐 Global Asset Classes Summary
Asset Class Impact
US Equities 📈 Bullish
Global Equities 🚀 Bullish
Bonds (Globally) 📈 Bullish
Commodities 📊 Bullish
Gold 🪙 Bullish
Dollar (USD) 🔻 Weakening
INR, EM FX 📈 Stronger
JPY, GBP, EUR 📈 Gain vs USD
📌 Conclusion
Scenario 10Y T-Note Futures Yields Risk Assets Dollar Commodities INR/EM FX
🟥 Breakdown Below 106 ⬆️ 5%+ 🔻 Bearish 💪 Strong ⚠️ Mixed/Weak 💸 Weak
🟩 Breakout Above 120 ⬇️ 4% 📈 Bullish 🔻 Weak 📈 Bullish 📈 Strong
🧠 Strategic Advisory (By Profit X Research™)
* Below 106: Prepare for defensive positioning, hold USD, reduce equity exposure.
* Above 120: Re-risk into growth equities, EMs, commodities, reduce cash.
* Watch real yield, not just nominal.
* Keep eye on Fed policy, liquidity, and credit spreads alongside this breakout.
📊 Follow for macro-backed market research 🔹 SEBI RA: Varun Bhargav
Prop. of PROFIT X RESEARCH
– INH000014508 🔹 Visit: profitxresearch.com/
Mobile- +91 9329587840
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