The 10-year real yield and dollar were showing signs of moderation earlier today. However, both instruments' trend-following indicators have now crossed up (black ellipses). Further to our previous article, there are intermarket forces that tend to play out when the real yield is on the move.
Typically, the real yield is:
1. Inversely related to risk markets such as the NAS100.
2. Inversely related to gold.
3. Positively related to FXCM's USDOLLAR basket.
If the real yield's EMAs develop angle and separation to the upside, there is likely to be an applied pressure to stocks and gold, and an underlying support for the greenback.
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.