10 year yield V FX, Stocks, Commodities, DXY

The 10 year Treasury yield on September 3rd was 1.43, stalled September 8 -10th then resumed the uptrend to close at 1.899 on September 13. The yield rose 46 points.

Yield aside, the 10 year bond price September 3rd reached 99.00 dropped to September 13 at 97.6/ 32 as Treasuries are priced in 32nds as opposed to foreign bonds at 0.01.

To recap, 99.00 Bond price Vs 1.43 yield.

DXY September 3 – 13 dropped from 99.37 – 97.87 or 150 pips. The 10 year yield rose and DXY dropped. No such concept exists to 100 DXY. The bond price and DXY are at highest points while yields at bottoms.

Currencies Sept 3 -13

21 of 28 currencies rose and 7 currency pairs dropped as follows
EURAUD
EURGBP
USDCAD
GBPAUD
GBPNZD
EURNZD
EURCAD

Stock Markets, All risk assets rose as follows

FTSE DAX S&P, Nikkei, ASX SPTSX

The VIX was down

Bond Prices Sept 3 -13

JGB’s = Down Gilts = Down Bunds = Down Treasuries = Down

Commodities Sept 3 -13

WTI Up, yet Skitzy prices while Brent = Up. As an aside, WTI since January had a 5 Point range in every month since January. WTI lacks a serious Correlation to not only GDP but all USD financial assets.

Nat Gas UP

Gold Down deeply

Silver Down deeply

wheat UP
Copper UP

Soybeans UP

To define the 10 year Bond price

Bond price Current 97. 6/32

Maturity Aug 2029

Coupon Rate 1.62

Yield to Maturity 34.13% means price expected if held to 10 year maturity.

To understand 32nds

30 year Treasury yield is priced in 32nds and priced at $312.50 for each 32nd or $3,000 per point. One basis point on a 10 year bond is $1000.
A guide
From fraction to decimal,
1/32 = 0.0313,
3/64 = 0.0469,
1/16 = 0.0625,
5/64 = 0.0781.
At 63/64 = 0.9844 then comes 1.0 as a fully traded basis point.
From Fraction to percent,
1/32 = 3.125%
3/64 = 4.687%
1/16 = 6.25%
5/64 = 7.812
63/64 = 98.437%. Then 1.0 as a fully traded basis point.

What is safehaven and Safehaven assets and how is it defined Answer is any asset that is or follows a bond price because of the guaranteed obligation placed on bond payouts by governments. Gold and Silver past and present falls into safe assets.

DXY is safe while USD as general concept as USDJPY USDCHF USDCAD Fails definition. Yet USDCAD is a severe outlier Currency.

Yield curve maybe defined by actual yields but a true yield curve is interest rates because interest rates price yields and bonds. Actually, Yields and bonds are secondary financial instruments.

 

Brian Twomey

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