It is reacting slower than expected, but the NAS100 IS reacting to higher real rates.
The US 10-year real rate (bottom chart) moved up on Friday, 3rd Feb (green dashed vertical). This started its foray into its hawkish channel between its upper blue and red bands. This corresponds with the NAS100 previous swing's apex. Since then, the index has drifted down and into its neutral channel between its blue bands.
The NAS100 is a growth index. It is sensitive to interest rate movements because of its inherent time value of money characteristics. The higher rates are biting into its present value and that is being reflected in its drift lower.
On Friday, NAS100 slipped 0.6%. Yesterday was the President Day public holiday in the states and the Nasdaq Stock Market was closed. Today will reveal if there is any follow through to Friday's down day.
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.