Treasuries Hit the Roof, Oil Reserves Grow, and Reddit Attacks

Feb 25, 2021

Yesterday the Treasury bonds yield growth had an extremely negative effect on the US stock market buyers. Along with the explanations for this listed in yesterday’s review, an increase in profitability simply means the appearance of an investment alternative, being formally risk-free. And this is an alternative to buying insanely expensive and overvalued risky assets. In general, nothing is surprising that there was no time for fun on the stock market yesterday.

The growth in Treasury yields is a very positive signal for the US dollar. It’s becoming more attractive in the foreign exchange market relative to other currencies. And this is also worth paying attention to, especially considering that the dollar is extremely cheap here and now. In this light, let us recall our mid-term recommendation to sell the pound against the US dollar.

Moreover, the UK never ceases to generate fundamental negatives for the pound. From the latest news, there’s some more information about the dangers Brexit can cause for foreign trade. The cost of transporting goods from France to the UK increased by almost 45%. Naturally, many carriers have reduced their activity in this direction. With all the ensuing consequences for British international trade.

The potential dollar growth can play a cruel joke on commodity assets. So far, gold is being blown for everyone. But it also shows what can happen to other assets. For example, oil. Besides, US production is recovering. Next week the OPEC Plus meeting will be held. It may bring many negative surprises for oil, and, according to API, the US oil reserves increased for the first time in the last 5 weeks.