Interesting charts May 23rd 2018
10-year Treasury yields fell back to test the psychological 3% today. The Fed’s Minutes highlighted less urgency to tackle the inflation rate coming in mildly ahead of target. That eased fears the yield would surge higher imminently. An overextension relative to the trend mean is evident, so there is scope for an additional pause in this area but a sustained move below 2.7% would be required to question supply dominance.
Gold remains steady below $1300. This is not the first time the price has traded below the trend mean since the jerky uptrend began in early 2017. However, it will need to push back above the $1300 level, preferably in a dynamic manner, to confirm a return to demand dominance in this area.
The Indian Rupee dropped to a new reaction low today, as it tests the 2013 and 2016 nadirs. We have seen intervention by the Turkish and Argentinean central banks this week and it remains to be seen how activist the RBI is willing to be in arresting the decline of the Rupee.
The JPMorgan India Trust continues to pull back from the region of the trend mean and a clear upward dynamic will be required to arrest selling pressure.