The bond markets are perhaps the least understood by most traders, and certainly, one that is rarely considered important, yet it is one of the most significant and even more so at present. Why? Because it describes so many aspects of the market from the cost of borrowing to risk sentiment in terms of yield and bond prices. Bond auctions rarely featured on any economic calendar 10 or so years ago, now they do. Why? Because they are important and form part of the relational analysis which is one of the key modules in the education program. Markets move for one reason only. Sentiment. Money chasing higher risk for higher reward or lower risk for lower reward. The constant economic see-saw which drives the capital markets of bonds, commodities, equities, and stocks. All are related. Forex sits at the heart but it is bonds that are often the catalyst.
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