Research Excerpts

How Intermarket Relationships May Affect US Financial Asset Prices For The Rest Of 2012

Posted on: Friday, July 6th, 2012

The following (green highlights) is a brief excerpt from our June 28th Commentary entitled Intermarket Relationships & Our Q3-Q4 2012 US Financial Market Forecast.

Our Commentaries, which are one of 8 different reports that Asbury Research produces for subscribers throughout the month, are periodic in-depth reports that provide a comprehensive analysis of specific areas of the US financial landscape, for the purpose of identifying emerging intermediate term price trends and the new investment opportunities that they may provide.  (Samples of each of our reports are available by clicking the link at the beginning of this paragraph.)

excerpt from our June 28th Asbury Research Commentary entitled:
Intermarket Relationships & Our Q3-Q4 2012 US Financial Market Forecast

Chart 6 below plots the yield of the US 10-Year Treasury Note (blue bars) alongside the US Dollar Index (black bars) daily since 2011, and shows that these two series have been inversely correlated to one another for more than a year

Chart 6

We think this relationship has emerged because the US economy (as indicated by the level of our interest rates) and the European economy (as measured by the strength of the euro) have been even more joined at the hip than usual over the past year or so as Europe slogs through its sovereign debt issues and the US worries about contagion.


Per the relationship shown in the chart above, this morning’s sharp rise in the US currency carries directional implications for long term US interest rateswhich we are seeing so far today, as well as for other US financial asset prices.

Asbury Research subscribers can view our entire 10-chart June 28th report by logging into our Research Center via the big gold button at the upper right corner of this screen.

Interested investors can request further information about our research by clicking here and completing the on-line form, or by calling our office at 1-888-960-0005.