Inside the Currency Market: Mechanics, Valuation, and Strategies

Bonds

Bond markets open before stock markets in many nations. This dynamic can presage the performance of stock markets. It's the premier indicator to determine if a stock market will open up or down, if a trade can run long or short.

Stock-market openings ensure that currency-pair direction is established, whether the trade can run, and how far. The method to check this dynamic is to monitor the interplay of government bonds and yields. U.S. stock markets that continually rise means bond yields continue to ascend. Stock markets that range indicate bond prices and yields ebb and flow throughout any trading session or through given periods. And down U.S. stock markets indicate bond prices are rising. Any one of the three dynamics may mean a trend ...