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MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
COMMODITIES
For most of the last couple of decades, the copper/gold ratio has been a coincident and sometimes leading indicator for large moves in US Treasury yields (as a proxy for general economic activity vs safe-haven trade).
- Looking at it charted below, it's only really since early 2021 that the correlation has broken down.
- At that time, the copper/gold ratio suggested a Tsy yield closer to 2.5%, but it remained well below 2%; now it's suggesting a rate closer to 2% but 10Y Tsys are trading closer to 3.20% (and indeed tested 3.50% this week).
- It's worth watching copper price dynamics over the coming weeks. The correlation has not worked well since early 2021 but a sudden recoupling with Treasuries could imply that 10Y yields have gone too far and a major deceleration in activity is at hand.
Source: BBG, MNI
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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