US 10-Year Is Showing Relative Strength
Russell Shor
Senior Market Specialist @ Tradu | Certified Financial Technician, Master of Financial Technical Analysis
- Interest rates are exceptionally important to markets and their direction.
- Capital tends to be attracted to the highest yielding market, especially if it is rising faster on a relative basis to other yields.
- The black line above shows the US 10yr.
- It has been rising steadily through most of 2018.
- The red line shows the spread between the US 10yr and the German bund and the blue line shows the spread between the US 10yr and British gilt.
- These 2 lines show that the respective spreads favours the US 10yr and this is a major reason for the USD's appreciation of late.