GLOBAL BOND MARKETS
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THEMES AFFECTING Bonds
ISHARES GLOBAL UTILITIES ETF
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Bonds as related to other asset classes
Bond prices and yields often drive price movements in currencies and other asset classes. In this section, we aim to explain how these movements are analyzed and traded by our dedicated contributors and in-house analysts.
A bond yield is the return an investor gets on a bond. Contrary to many other assets, bond prices and bond yields are inversely related. When the price of a bond increases, the yield decreases. When the price of a bond decreases, the yield increases. Thus, a so-called rally in the bond market means that yields decreased, while a bond sell-off means that yields increased.
It is important to know the underlying dynamic of why a bond's yield is rising or falling. This movement can be based on interest rate expectations or market sentiment, such as uncertainty, which triggers a ‘flight to safety’ to bonds, traditionally considered less risky compared to stocks.
The change in interest rates, either the target rate or market rates, is important because it makes stocks or bonds become more attractive. When this happens, prices tend to trend as money flows from one vehicle to the other until the new relationship is adequately reflected in prices.
Bonds and stocks are in constant competition for investor money, and less so commodities. These, particularly Gold, usually trend in the opposite direction of bond prices (falling commodity prices usually lead to higher bond prices, and vice versa). Therefore, commodities generally trend in the same direction as interest rates.
US Treasuries
If you trade USD-based or USD-quoted currency pairs, it is crucial to monitor the United States (US) bond market, as movements in Treasury yields impact the US Dollar. Treasury yields’ movements are often driven by comments from Federal Reserve (Fed) officials, so staying updated on news coming from US monetary authorities is essential. US stocks usually get a boost from rising bond prices (falling Treasury yields), especially in inflationary periods. But if they don't, then it's worth looking for market sentiment and identifying reasons for the cautious stance in bond markets. US stock prices can also rise alongside falling bond prices (rising Treasury yields) during deflationary periods. In such cases, both stock prices and interest rates rise, driving global demand for the US Dollar.
UK Gilts
Global bond prices tend to move in synchrony, but occasionally, a country's bond market may experience sharper movements compared to others. Sometimes this volatility is related to currency fluctuations. The Gilt, the 10-year benchmark in the United Kingdom (UK) fixed-income market, typically has a positive correlation to the Pound Sterling (GBP). A decoupling between these markets can serve as an early alert that an intermarket relationship has shifted. Changes in foreign exchange prices can overwhelm relative return calculations for international investors buying Gilts. Stripping out the currency component, UK Gilts should still provide returns to investors. Otherwise, other bond markets such as US Treasuries, may become attractive. Additionally, a prolonged trend in rising energy prices is a factor to consider as it will affect inflation expectations and therefore the Bank of England's (BOE) monetary policy.
Latest Latest Bonds & Interest Rates Analysis
Editors' picks
EUR/USD clings to daily gains above 1.1800
EUR/USD keeps the fresh bid bias around the 1.1800 region as the NA session draws to a close on Tuesday. The pair’s decent bounce comes on the back of fresh downside pressure on the US Dollar as investors continue to fade the so-called “Warsh trade”. Next of note on the euro docket will be the preliminary inflation data in the euro zone on Wednesday.
GBP/USD consolidates ahead of Bank of England rate decision
The Pound Sterling traded in a narrow range against the US Dollar on Tuesday, edging modestly higher to near 1.3700 as markets adopted a cautious stance ahead of the Bank of England's first policy decision of 2026. GBP/USD opened the session at 1.3665 and touched an intraday high near 1.3707, with the pair consolidating below the multi-year high of 1.3869 posted in late January.
USD/JPY extends winning streak as US Dollar rebounds, US data awaited
USD/JPY extends the advance to near 156.00 on USD’s continued outperformance. The US Dollar gains on Kevin Warsh’s nomination for Fed’s new Chairman and upbeat ISM PMI data. BoJ officials continue to support tightening monetary conditions.
Gold recovers above $4,950 as US-Iran tensions boost safe-haven demand
Gold price trades in positive territory near $4,985 during the early Asian session on Wednesday. The precious metal extends the rebound after a historic and volatile sell-off last week. Traders weigh the next round of US economic signals and the broader demand for safe-haven assets.
WTI Price Forecast: Bullish 21-day and 50-day SMA crossover keeps upside bias intact
WTI reboundswith intraday buying lifting price back above the 200-day SMA near $61.95. The daily chart remains constructive, with a bullish crossover between the 21-day and 50-day SMAs. The ADX at 32.81 continues to point to a firm and strengthening trend.