The historical correlation between the DXY and 10-year rates is broken.
Traditionally, a strong dollar accompanies high yields. But since mid-2024, the DXY has fallen significantly while yields have remained high at around 4.5%.
This movement suggests that other factors are dominating exchange rate dynamics: capital flows to emerging markets, expectations of global monetary policy, and US fiscal issues.
Hmm 🤔
Woot! Bond rates to the moon!
Sort of looks like yield is clipping, i.e. there's artificial suppression. Perhaps demand for treasuries is being manufactured.