Just as market sentiment began improving and the US dollar index showed its first 3-day losing run since March, selling resumes across the board. Yesterday's solid US retail sales gave Powell the confidence to stick to his “inflation-remains priority” rhetoric. Interestingly,
DXY, EURUSD and US-10 year all stabilized at their 21-day moving averages. No, this is neither a piece about “bear market rallies”, nor about “Intermarket technical confluences” covered successfully at last Thursday's market low. This in fact is about how the market could resume rallying into next week—despite Wednesday's wobble.
Can you provide some insight into the decoupling of UST's and the Yen. It seems like the once correlated assets have decided to march to the beat of their own drum. Is the yen starting to price in potential currency/sovereign issues, bonds acting as flight to safety from US equities and Greece, or is there a larger issue here?
Thanks
Mike
Is there a level you are watching on US 10 and 30 years which are "game changers" for gold and SPX? I guess I am looking for a level in yields in which equity buyers start to get concerned, reflation vs. inflationary feelings. Thanks
Thanks