Pause for a second and check this out. the most significant correlation btw the yields and ccy is changing (or already changed). higher yields lower dxy tells me that the investors not only selling US papers but they are also taking their dollars back home. chart attached: bars US10 yields, green line DXY, blue GOLD. markets started to treat US assets like an EM country. twin deficit, higher yields lower currency... I think there is a good risk in being gold short, long dxy and US bonds... apreciate any comment to help me understand the madness
Looking back, at least on the short term, that seems to have worked this past week, at least with short gold and long dxy.
Not sure who is buying bonds but someone or something is keeping bonds from absolutely crashing.
My thoughts are that higher rates will cause equities to suffer - hence the efforts to keep bonds "stable".
Friday there was rumblings from the Fed about possible QE in the event of the "next" crisis that would be in the form of asset purchases (eg. treasuries)
Also there was news about forgiving student debt. Neither of these are positive for the dollar.
Not sure who is buying bonds but someone or something is keeping bonds from absolutely crashing.
My thoughts are that higher rates will cause equities to suffer - hence the efforts to keep bonds "stable".
Friday there was rumblings from the Fed about possible QE in the event of the "next" crisis that would be in the form of asset purchases (eg. treasuries)
Also there was news about forgiving student debt. Neither of these are positive for the dollar.