In the previous article "The same non-agricultural formula, different ways to deal with it!".talked about the latest U.S. non-farm payrolls data, which finally cooled down after the market's speculation about the Fed's expectation of a rate cut as soon as March 2024. According to the CME's "Fed Watch": the Fed maintained interest rates at 5 in December25%-5.The probability that the 50% interval will not change is 971%, with a 25 basis point rate hike of 29%。The probability of keeping interest rates unchanged by February next year is 932%, the probability of a cumulative rate cut of 25 basis points is 4%, and the probability of a cumulative rate hike of 25 basis points is 28%。
As shown in the chart above, although the impact on the interest rate meetings in December and February next year is not significant, that is, it will continue to be on hold, the market previously speculated that the probability of a rate cut in March next year was once close to 65%, and now after the non-farm payrolls data landed, the data has fallen back to around 45%. This is also why after the data is released, I will make the judgment that I will continue to smash the market. Judging from the fundamentals of today and tomorrow, it is still very unfavorable for the bulls who want to ** or have **. On the one hand, there is a revision of expectations due to labor market data, and on the other hand, the US Treasury will hold a total of $58 billion in bond auctions today and tomorrow. At present, the mainstream view of the market is generally thatThe "flooding" of long-term bonds in the United States has far exceeded market demand, this week's two important auctions may plunge the previously sharply ** U.S. bond market into a "whirlpool of pain" again. On Monday, the U.S. Treasury will conduct a $37 billion auction of 10-year Treasury bonds, while on Tuesday there is a $21 billion auction of 30-year Treasury bonds, according to the data. The pressure caused by large-scale bond issuance has exacerbated the market's concern about the imbalance between supply and demand in the bidding of U.S. bonds this week. 
As shown in the chart above, according to the latest monthly statement from the U.S. Treasury, in the first month of the fiscal year beginning October 1, the U.S. Treasury paid $88.9 billion in interest on its bonds, while the U.S. Department of Defense spent $83.4 billion on military programs, that is, the interest expense on bonds has exceeded defense spending. In addition, what makes Wall Street even more nervous is that the auction of US 30-year Treasury bonds last month was very dismal: on November 9, the US Treasury auctioned $24 billion of 30-year Treasury bonds, and the dismal demand was described as a "complete disaster". At that time, U.S. stocks and U.S. bonds were hit hard, and the yield on the 30-year U.S. Treasury note hit its biggest one-day increase since March 2020. Looking to the futureAccording to the Congressional Budget Office (CBO), the share of US debt in US GDP could climb from the current 120% to 200% in the long run. 