US dollar usually moves very closely with bond yields
So, as yields rise, the dollar should also strengthen
But for the first time in years, that connection is starting to break
This suggests either rates must rise even more to stabilize the dollar
Or the dollar is at real risk of a deeper collapse
BREAKING: Japan's 30-year government bond yield rose to 2.96%, its highest level in almost 25 years. At the same time, 40-year bond yield reached 3.44%, the highest since its debut in 2007. Yields on Japanese long-term bonds have DOUBLED over the last 2 years. This comes as demand for long-term bonds has fallen relative to elevated supply. The Bank of Japan has gradually shrunk the size of the balance sheet over the last 18 months while most major Japan’s life insurers have recently reduced their holdings of bonds. Japan is also one of the most indebted countries in the world, with a Debt-to-GDP ratio of 251%. https://x.com/KobeissiLetter/status/1922391650149818451
...markets are not paying attention to rising YIELDS as momentum trade going berserk is looking very unhealthy
S&P Momentum just made a new all time high today. The reach for risk as measured by the ratio of Momentum / Low Vol is the most since March 2020. The 2020 reach for risk came at a low for both indices, whereas this reach for risk is coming at a Momentum ATH unconfirmed by every other major index. The momentum algos are out of control. https://x.com/SuburbanDrone/status/1922349171715067947
