Check out the equal-weight energy index:

It’s finding support where I would expect – the prior-cycle highs from 2018 and a key retracement level off the 2020 low.

It's the weekly bond edition of What the FICC?

The Silicon Valley Bank $SIVB collapse dominates the week's headlines.

While risks appear isolated for now, unlike in 2008, the next chart reveals a storm brewing beneath the surface...

From the Desk of Ian Culley @IanCulley

US bank stocks big and small took a beating Thursday, with the Bank ETF $KBE posting its largest single-day decline since 2020.

The steep sell-off came on the heels of Silicon Valley Bank’s $SIVB Wednesday announcement of a $1.8B loss, mainly due to accepting unrealized losses in US Treasuries.

Based on SIVB’s acute exposure to the tech industry, you can argue larger banks with more diversified portfolios and clients don’t carry the same risk. And they don’t.

Regardless, the next chart reveals a storm brewing beneath the surface...

Check out bank stocks (KBE inverted) overlaid with the US Treasury 2s10s spread:

I inverted KBE to highlight the strong relationship between banks and the yield curve. The two lines look almost identical over longer timeframes.

It's the weekly currency edition of What the FICC?

Dollar and rates were big themes last year – rising in tandem – and continue to be as we head into March.

It shouldn't come as a surprise as the next chart reveals the crux of the story…

Check it out!

From the Desk of Ian Culley @IanCulley

What year is it? 

Is it 2023 or 2022? Because it’s starting to feel like last year all over again…

No, Will Smith hasn’t slapped anyone (that I’m aware of). And I’m confident Bennifer 2.0 is going strong (solely based on Superbowl commercials).

But that’s not my concern. Here’s what does have my attention: the dollar and rates. 

These were big themes last year – rising in tandem – and continue to be as we head into March.

It shouldn't come as a surprise as the next chart reveals the crux of the story…

Check out the overlay chart of the US dollar index $DXY and the US 10-year yield $TNX with a rolling 126-day correlation in the lower pane:

Silver is clawing its way back after breaking down from a month-long consolidation and undercutting a critical shelf of former lows.

As we talked about last week, it all comes down to risk appetite. Silver bid speaks to a healthy risk-seeking environment favoring all precious metals.

And that's what we saw last week...

From the Desk of Ian Culley @IanCulley

Just a week ago, we captured the entire precious metals space in a single sentence: 

"Nothing bullish is happening for precious metals, while silver slides below multi-year support."

Is it really that simple?

Let’s take a look at an interesting development in precious metals that might change our minds…

It's the weekly commodity edition of What the FICC?

The wheat complex looks interesting at current levels, offering trading opportunities in either direction.

Check it out!

From the Desk of Ian Culley @IanCulley

Last week I covered the soybean complex and corn.

As promised, I’ll cover the wheat complex this week, rounding out our coverage of the grain markets.

Let’s dive in!

Before we start, check out this breakdown of the different types of wheat varieties. I love to nerd out on this stuff – anything that involves maps, I’m hooked!

Today I’ll cover the most actively traded US contracts; Chicago Soft Red Winter Wheat (SRW), Kansas City Hard Red Winter Wheat (HRW), and Minneapolis Hard Red Spring Wheat (HRS).

The first two contracts trade on the Chicago Board of Trade (CBOT), with soft red wheat first trading on the CBOT in 1877. Minneapolis spring wheat trades on the Minneapolis Grain Exchange (MGEX).

These different types of wheat derive their names from their growing regions, where they initially come to market, and even their protein levels (hard = higher protein, soft = lower protein).

It's the weekly bond edition of What the FICC?

Developed European benchmark interest rates are posting fresh highs. Those potential failed breakouts back in early January have quickly turned into nothing more than false or premature moves.

And while US yields continue to climb, their recent rise pales compared to their European counterparts.

Check it out!

From the Desk of Ian Culley 

Markets churn sideways, plagued with indecision. But one thing is certain…

The global rising rate environment remains intact.

Developed European benchmark interest rates are posting fresh highs. Those potential failed breakouts back in early January have quickly turned into nothing more than false or premature moves.

And while US yields continue to climb, their recent rise pales compared to their European counterparts.

What does that imply for domestic rates in the coming weeks and months?

For the past year and a half, we have turned to developed European yields for insight into the direction of domestic interest rates. 

The analysis proved insightful as the rising rate environment has been global in scope. Europe has given a nice heads-up regarding the direction of yields stateside. And the market continues to support this approach. 

Check out the German 10-year yield:

It's the weekly currency edition of What the FICC?

Instead of allowing the market to dictate your emotions along with the herd, let it simply highlight the path of least resistance.

That’s what I’m doing.

Check it out!