Post by stockpicker on Jan 24, 2014 21:56:52 GMT 7
The US 10 year yield has taken a tumble and it is on its way down as shown in this chart
This article tried to blame the emerging markets' contraction that have pulled investors back to buy the treasury bond as a safe heaven. The lower yield then sent USD spinning to its low. But it predicted that yield will climb back up to 2.99% by March 31, a tad lower than the 3.02% predicted on Jan 6. This is quite consistent with the TNX chart showing support at around 2.6-2.7, where fibo 61.8 lies. Should yield rise by that time, it should scale another new high; otherwise, it will spell trouble for the 10-year yield. Yield will rise again if there is another tapering announcement.
The U.S. dollar is safer right now and will continue to strengthen. When your costs decline on a dollar basis, and your revenues increase on a dollar basis, your profits will be higher. The reverse is true when your costs increase on a dollar basis, and your revenues decrease on a dollar basis, your profits will be lower.