Still not too convincing, 40mins will tell
- #43,422
- Feb 21, 2014 10:23am Feb 21, 2014 10:23am
- Joined Dec 2013 | Status: Trader | 2,141 Posts
f(z)=z2+c
- #43,428
- Feb 21, 2014 11:19am Feb 21, 2014 11:19am
{quote} Hello. Sorry , May i ask you some question ? Why and how the Tnote 10years yeld and U/j are correlated ? Please sorry for my english and thanks a lot
There are a few reasons why they are so correlated but the most important (for small retail 4X traders...) has to do with risk appetite. When people are buying stocks ("risk-on"...), they are not afraid of a crash. But when they buy stocks, that usually means they sell bonds, which means that bonds will go down in price. If bond prices go down, the yield on bonds will go up in order to attract more customers.
On the other hand, if people are afraid of stocks ("risk-off"...), they will buy bonds, sending the yield down.
The Japanese yen is a "safe haven" currency, which means that when people are afraid of stocks, they will also buy Japanese yen, which then sends the yen pairs lower. So the correlation has to do with fear:
When stocks are sold off, people will buy bonds (yield lower...) and buy yen (yen pairs lower...).
There's also "carry trade" considerations for the guys wielding the big money to worry about. You can search the term and find out what that means.
I hope this helps.
- #43,429
- Feb 21, 2014 11:31am Feb 21, 2014 11:31am
{quote} Greetings! And don't worry about the English. I'm sure your English is much better than my (whatever language you speak...). There are a few reasons why they are so correlated but the most important (for small retail 4X traders...) has to do with risk appetite. When people are buying stocks ("risk-on"...), they are not afraid of a crash. But when they buy stocks, that usually means they sell bonds, which means that bonds will go down in price. If bond prices go down, the yield on bonds will go up in order to attract more customers. On the...
thank you very very much!!!!
- #43,430
- Feb 21, 2014 11:37am Feb 21, 2014 11:37am
{quote}
- #43,432
- Feb 21, 2014 11:47am Feb 21, 2014 11:47am
Now that's funny!
Thanks for the giggle.
_____
Addo: And so much for the Japanese fundamentals theory. SPX coming off hard, 10-year yields falling...and so is the U/J. I knew this ramp was fake.
Next week, look out below.
Thanks for the giggle.
_____
Addo: And so much for the Japanese fundamentals theory. SPX coming off hard, 10-year yields falling...and so is the U/J. I knew this ramp was fake.
Next week, look out below.
- #43,438
- Feb 21, 2014 12:38pm Feb 21, 2014 12:38pm
{quote} Absolutely. And if you don't understand something, maybe I can clear it up for you. There are very many bright traders on this board (probably more in here than in any other forum in Forex Factory...), so they may be able to help, too.
- #43,439
- Feb 21, 2014 12:38pm Feb 21, 2014 12:38pm
- | Joined Dec 2009 | Status: Bear | 1,009 Posts
{quote} Wow. Okay. Exam question for you then: Explain the relationship between yields on the US 10-year Treasury Note to the movement in USDJPY.
For correlation between US 10Y T- and UJ, one would probably would like to open chart and include those 2 instruments