Mish's Daily
Are Long Bonds Now the Place for a Flight to Safety? June 23, 2025
A war in the Middle East can have significant and multifaceted impacts on the United States.
Typically, oil and gas would have the biggest impact with threats of supply disruptions.
However, the oil market, while higher from earlier in June, today did not react to news of more Iranian bombing.
In fact, oil and gas both fell in price.
Financial market volatility, another by product of war, hit the markets at midday with volatility spiking. Nonetheless, the volatility died down soon thereafter.
Gold and silver expectedly gained, however, not as robustly as one might imagine.
Long bonds though, cleared the 50-DMA for the second time since the end of April.
Back then, the rally did not last.
While yields moved down today, and oil prices fell, it seems the best reason we can assume for the rally in TLTs today is the anticipation that central banks and perhaps our Federal Reserve will cut rates.
Full chart analysis:
https://marketgauge.com/resources/mishs-daily/are-long-bonds-now-the-place-for-a-flight-to-safety/
The exact opposite occurred of what I expected today. With the prospect of war almost inevitable at this point, I thought energy would explode and stocks would fall. Similar to when Russia invaded Ukraine. Looks like I got a long way to go in understanding the markets.