Technically a bullish yield scenario is building up. The implications are interesting for Stocks and FX both.
- Selling US bonds -> weakening effect on USD
- Yields climbing up -> risk-on sentiment, equities up
- Yields climbing up -> markets reevaluate Fed message and start to reprice rate hike -> USD supportive
Contradictory messages are visible from the bond markets, the reason for yields moving up will be crucial (FED pricing, or bond selloff)
Action:
Correlation between FX and Bond market is dubious, check eco data instead for clues. Weaker US data -> more dovish Fed -> weaker DXY
- Selling US bonds -> weakening effect on USD
- Yields climbing up -> risk-on sentiment, equities up
- Yields climbing up -> markets reevaluate Fed message and start to reprice rate hike -> USD supportive
Contradictory messages are visible from the bond markets, the reason for yields moving up will be crucial (FED pricing, or bond selloff)
Action:
Correlation between FX and Bond market is dubious, check eco data instead for clues. Weaker US data -> more dovish Fed -> weaker DXY
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.