Market review 23.08.27

Return of the dual wrecking ball

Hello everyone,

Today, we’ll look at what’s happening in the Intermarket both in the short-term (weekly charts) and within the context of the long-term (monthly and quarterly charts).

Let’s dive in.

The dual wrecking ball: Dollar and Rates

For the first ten months of last year, we saw a sharp rise in bond yields and the US Dollar. This coincided with equity market weakness.

But in Oct, yields and the US Dollar peaked. They then retreated and went sideways for many months. Equity markets were allowed to breathe again and rallied well into this year.

Now, the dual-wrecking ball is back. UUP made a breakout a couple of weeks ago, and the 5yr Treasury yield just broke out this week:

For some big-picture context, the 10-year yield made a multi-decade breakout last year: