In this respect, the bond market is a useful indicator on the overall
state of the economy. Surging inflation forced yields higher in the
first half of 2022 and forced the Fed to quickly abandon its dovish
policy and tighten its monetary policy. But after peaking on June 14 at
3.49%, the 10-year Treasury yield has since moved below 3%, closing
today's session at 2.82%.
If yields continue their retreat, the odds of a recession will rise as
investors begin to factor in slower growth and diminishing inflation
risk. The silver lining in that case would be that the pressure would
come off the Fed to hike rates. Even if another 75 point hike on July
27 is already baked into the market, significantly lower bond yields
could help the Fed take a "pause" at its September meeting.
Using financial astrology, we can make some speculative inferences about
the future direction of interest rates and bond yields. The horoscope
of the first trade of US Treasuries (Aug 22, 1977) is especially
helpful in this respect. In terms of interpretation, the basic rule of
thumb is that an afflicted chart would suggest lower prices for bonds
and thus higher yields, since they have an inverse correlation. A more
favourable chart pattern would indicate increased demand for
Treasuries and hence, lower yields.
Currently, the chart is running the Venus-Saturn dasha period. Venus is
a benefic planet, of course, and its placement in the 11th house of
gains is even more positive. This suggests that the Venus major dasha
period (2007-2027) should be generally favourable for bond prices.
Indeed, bonds have generally done well since the 2008 meltdown aa yields
have been kept artificially low by the Fed's QE policy. At the start
of the Venus period in Sep 2007, the 10-year Treasury yielded 4.5%.
Interest rates have been in a downtrend in the 15 years since, with the
2020 Covid low at just 0.5%.
But the other part of the dasha equation is Saturn. The Saturn minor dasha period (July 2020 - Sep 2023) looks less positive for bonds. Saturn is a natural malefic and it is very badly placed in the 12th house, and just one degree away from the equal house cusp. It's wide conjunction with the Sun across signs doesn't seem very helpful, nor does the aspect from Ketu in the 8th house. Overall, the Saturn period should be bearish for bonds. And indeed it has been very bearish since the 10-year yield stood at just 0.65% in July 2020 at the start of the Saturn minor period, and has now increased all the way to about 3%. Bonds have been a terrible investment during the pandemic as the central bank money printing has increased inflation risk and pushed investors into equities and other risk assets.
With the Venus-Saturn period due to end in Sep 2023, it seems likely that yields will remain fairly high for another year at least. While interest rates could resume their upward climb over the next year, it is also possible that yields could stabilize here, albeit at much higher levels than in 2020. In that sense, the bearish promise of the Saturn minor period would be fulfilled as long as 10-year yields are significantly higher than they were in 2020 (0.65%). But that seems almost a given at this point.
Just to round out the dasha analysis, we can also see how the preceding
Venus-Jupiter period (2017-2020) was very bullish for bonds as yields
fell sharply from 2.5% to 0.65% over that three year period. Looking
ahead, the Venus-Mercury period (2023-2026) should be more bullish for
bonds than the current Venus-Saturn period since Mercury is a benefic
and it is well-placed on the Ascendant. However, the square aspect from
Mars is close enough that it could introduce some significant
volatility at various points in the Mercury minor period.
We can look at the transits for a more short term perspective. The
recent dip in yields has coincided with some favourable influences from
Jupiter and Venus. Jupiter (13 Pisces) forms a very nice 120 degree
aspect with the natal Moon (12 Scorpio). Since Jupiter is due to station
retrograde in late July and will again set up that same aspect in late
August, there is good reason to think that yields could fall further
in the coming weeks.
The transits of Venus usually are less significant due to its relatively
high speed. But as the major Dasha lord, its transits hold a greater
potential importance. We can also see that the transit of Venus
through its own sign of Taurus coincided almost exactly with the fall
in yields after June 14. Since Venus usually does well in Taurus, it
stands to reason that bonds would also rally during this transit.
Venus entered Taurus on June 17 -- just three days past the peak in
yields -- and will leave this sign on July 13 and enter sidereal
Gemini. Therefore, there could be a bit more room on the downside for
yields to fall while Venus is well-situated over the next week or so.
Weekly Market Forecast
Stocks remain somewhat weak after the holiday break, although tech and
growth stocks rallied on the decline in yields. The rest of the week
looks mixed as the Venus-Sun alignment with Uranus and Chiron should see
some upside, however temporary. While this is normally a very
positive set up, it could end up triggering the ongoing bearish
Saturn-Neptune alignment since their respective angular separation will
be equal later in the week. The Saturn-Neptune alignment is very
slow-moving and bearish and is one reason why market sentiment has been
so poor over the past two months.
Taking a closer look, we can see that Saturn and Neptune are 31 degrees
apart this week, Uranus and Chiron are 31.5 degrees apart and Venus and
Uranus will be 31 degrees apart on Friday. Generally speaking,
planetary separations that mirror a prominent Saturn alignment often
indicate a bearish market outcome. Perhaps that makes Friday the most
vulnerable day for a decline this week.
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