U.S. Interest Rates & Dollar Continue to Rise
12/22/09 — Jay Norris — jnorris@brewerinvestmentgroup.com –Treasury Bond and Note prices continue to sell-off taking U.S. Interest Rates and the U.S. Dollar higher. The Weekly reversal which occurred the week ended Dec 4th — see chart below — which is the same date that the EURUSD closed below a 9- month bull trend-line, continues to dominate price action in all the financial markets.
Chairman Bernanke’s declarations well over a month ago that the Fed will eventually stop supporting both mortgage backed securities and treasuries by the end of the 1st quarter of 2010 have sunk in, as price action continues to press bonds lower and interest rates and the Greenback higher.
While more times than not traders are better off focusing on the effects of price action and moving along with it, recent U.S. Dollar strength proved a good lesson on the cause of price action: in this case higher interest rates, determined in the open market place. The chart below is that of the front month bond futures contract which trades in Chicago on the CME.
Jay Norris
www.trading-u.com
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