IIFT Daily Note with Peter Brown

Bonds

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The dollar rise can be directly attributed to the higher yields on US bonds. 10 year is now at 2.30%. With the interest rate outlook in Europe and Japan  benign, the higher yields in the US will attract investors. We are now in a situation where the price movement in the US 10 year will have a direct impact on the Dollar.

This morning we reached new highs on the bonds but the move lower has allowed the Euro/USD to bounce. FX trading is now about bonds for the short term.

Gold contiued it’s selloff yesterday, reaching 1640 low. Initial target is 1620 but be very carefull with Gold the bounces will be severe.

The S&P had a reasonably quiet day yesterday, getting used to the new highs. 1385/1395 was the range. Think we could mount an attempt on 1400 today. Remember jobs figures are at 12.30.

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