US equity markets are stress testing important technical support levels just above the summer lows heading into what I view is a binary trade-tariff backdrop. Short-term momentum indicators, tracking 2-4 week swings, are oversold and beginning to bottom as equity indices attempt to stabilize at support. That suggests a rebound is poised to take hold.
What I find particularly interesting is the behavior of markets outside of equities, notably bonds, gold and few risk-on currencies. For example, as equities flip-flopped through the past week US 10- and 30-year Treasury yields diverged climbing to new weekly highs as did the risk-on euro-yen currency pair. In addition, gold broke its relative uptrend to copper, something that had been in place since April.
You are trying to access member-only content. You are either lacking the required privileges or you are not logged in to view this content.
You need to have an active FSI Macro, or FSI Pro subcription in order to gain access to this article.
If you are already a member at FS Insight, please Sign In. If you don’t have a subscription to FS Insight yet, please consider reading more about Our Services.
