Nasdaq, Bitcoin, Inflation – FinTwit Trends To Watch Next Week

Inflation fears – or lack thereof – will likely be reflected by changes in Treasury yields and corresponding US Dollar volatility. Another sharp jump in Treasury yields could indicate that bond market investors are taking upside risks to inflation seriously and pricing in potential that the Fed might need to taper policy sooner than rather than later. Invalidating technical resistance posed by the 1.70% level could be telling. Though this may weigh negatively on speculative assets like stocks and crypto, it would likely coincide with a stronger US Dollar as highlighted by the generally positive correlation between the DXY Index and ten-year Treasury yields.

Conversely, softer Treasury yields would likely suggest that the Fed is doing its job keeping long term inflation expectations anchored and markets buying into the transitory narrative. This is why FinTwit traders might want to consider keeping the direction of Treasury yields and the US Dollar toward the top of their radars for potential bellwethers to where markets might head next.

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