Tuesday, March 25, 2014

Yen vs. US Tbond

These two charts show a strong recent correlation between strength in the Yen and strength in the US bond market.
At a time when interest rates are expected to rise from the action or inaction of the US Fed we would expect the bonds to decline in price as investors demand higher interest on their money. Such is not the case yet. There seems to be a strong appetite  for US bonds paying 2.7% over 10 years.....

And the Japanese want a weak Yen to keep their exports strong. But the Yen is showing signs of strength.

If the price of US Treasuries is trending higher it seems a sign of a weak economy. And that at a time of reduced intervention by the US Federal reserve bank could mean a time of volatility for stocks.
To say the least.

I expect a drop in the stock averages.

Some day....

gh

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All comments are appreciated as it will give me a chance to adjust my content to any real people who may be out there. Thank you. gh