Experts please advice if treasuries fall so what happens?

P

philipatt

I needed some advice.

If treasuries fall is it Bad for USD? Does it means people are selling Dollar?
How does it effects FED Interest rate, does it tells, FED will cut rates?

And does it means if treasuries fall, Stocks will go up??
 
I think there's quite a complex interdependence... If treasuries fall, foreign investors are unlikely to invest in USD. But it's positive for stocks, since low interests will lift economy.
These are just my .02 and it's a very simplified view :)
 
Quote from philipatt:

I needed some advice.

If treasuries fall is it Bad for USD? Does it means people are selling Dollar?
How does it effects FED Interest rate, does it tells, FED will cut rates?

And does it means if treasuries fall, Stocks will go up??
More...

I'm no expert but I play on on Elite Trader.

Often Treasuries rally on dollar weakness because a lower dollar is usually systematic of a weak domestic economy (or weaker compared to other developed nations) and that'll mean an easing Fed. Hence in a perverted way a weak dollar is sometimes bullish for Treasury prices. Nothing of course is etched in stone as other fundamentals can cause the exact opposite effect.
 
You need to be careful when looking at interest rates, you cannot do it in a vacuum.The effects on currencies from interest rate movments will depend upon the pair.You need to look at interest rate differentials, not just raw rates.
 
Anyone knows the correct answer.

If Treasury Falls.. Its bearish for USD ?
If trasury Rises.. its Bullish for USD?

is it correcT?
 
Quote from philipatt:


If Treasury Falls.. Its bearish for USD ?
If trasury Rises.. its Bullish for USD?
More...
You got the correct answer from Pabst.

When you say "treasury falls", what are you talking about? The price, or the yield?

If yield falls, it's bearish for the dollar, *unless* the other countries also having falling yields. If their yields are falling faster, it's bullish for the dollar.

It's much like inflation expectations--expecting high inflation means entirely different things for the market than being *surprised* by high inflation.
 
Quote from FullyArticulate:

You got the correct answer from Pabst.

When you say "treasury falls", what are you talking about? The price, or the yield?

If yield falls, it's bearish for the dollar, *unless* the other countries also having falling yields. If their yields are falling faster, it's bullish for the dollar.

It's much like inflation expectations--expecting high inflation means entirely different things for the market than being *surprised* by high inflation.
More...

How do we know if its yield or price.
By the way which treasury is good to see 5 Yr

5 Year US T-Notes Composite

Or what to see. and how do we calculate..

Thanks
 
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