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Inter Market Analysis

Inter market analysis is a series of articles studying related segments of the market to identify lead lags between trends in each segment. This can often forewarn you of impending changes in trend and allow for planning of required action based on it. For example midcaps v/s large caps, currencies v/s commodities and US markets v/s European markets and so on. In a global environment inter-market relationships are not restricted to a country but between countries and their respective asset classes as well.

US 10 year T Notes

The 10 year note yields moved higher yesterday and the yield chart appears more clear that wave 3 up may have started. The chart of the notes itself does not show this as clearly. The yields have broken out of the downtrend and made a higher bottom. Once the recent top is surpassed we should see a meaningful rally on yields.

notes-260717

US 30 year Treasury bonds

US 30 year bonds closed down for the day ending a 3 wave advance from the July bottom. This should mostly mean that wave II up is over and wave III down starts next which should see bond prices fall much further below the wave I low. This ahead of the FED could mean that any rate pause is discounted in the prices.

bonds-250717

Relative Rupee

In case you did not notice the INR pair, the USDINR, has note exactly been falling like the rest of the worlds currency pairs. The relative rupee is the RS of the USDINR with the DXY or dollar index. This is rising since April. Meaning that on a relative basis holding steady the INR is actually weaker than the dollar. We in effect have a currency devaluation quietly. 

inr-190717

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