Bond yields watch: what are you seeing?
Yields are the market's interest-rate expectations made visible, and their moves feed every currency pair. This thread collects what members are seeing across the major yield curves.
Share:
- the yields you track and what they're doing
- how yield moves are reaching your pairs
- the curve signal that has your attention
Background: bond yields and exchange rates.
Background: Bond yields and exchange rates: why currency traders watch the 2-year yield
Currencies often follow the gap between two countries' government bond yields. How yield differentials work, why 2-year yields track central bank expectations, and when the link breaks down.
Why do currency traders watch bond yields?
Because money tends to flow toward higher returns. The gap between two countries' bond yields, especially 2-year yields that track central bank expectations, often moves in line with their exchange rate.
What is a yield differential?
The difference between the yields on comparable government bonds in two countries, such as US and German 2-year bonds. A gap widening in one country's favour tends to support its currency.
Comments
Log in to join the discussion. Comments follow the community guidelines.
Log in to commentLoading comments…