EUR/USD, Platinum and DAX: Rising Yields Pressure Markets

US 2-Year Yield

The 2-year yield looks like it is pulling back just a bit, and that’s where I start. But the 10-year yield is starting to rise yet again, so there is a lot of chaos in the bond market. What this more likely than not will mean is that the U.S. dollar starts to pick up strength yet again.

This is going to be very rough on some risk assets. We are moving based on inflation expectations, especially out of the energy sector. So, as long as the situation in the Middle East continues, that will be part of the pressure.

EUR/USD

The euro looks like it’s hanging on by a thread here. I’m watching this one very closely. We’re not too far from breaking a major swing low, somewhere around 1.13. I think the whole thing comes unraveled for about 300 pips. Short-term rallies here I still look at with suspicion. I look at them as potential selling opportunities.

That 10-year yield in the United States, being at 5.133% as I record this video, is a major contributor to what we’re seeing here. But don’t sleep on the idea that Europe may not have enough energy this winter. That’s going to be a major problem for them as well.

Platinum

Platinum is testing support near $1,750. I’m watching it to see whether or not we can bounce. If we break down below the $1,700 level, or perhaps even $1,725, we begin the process of falling. It could open up a pretty significant drop toward major support at $1,600.

DAX

Finally, in the German DAX, we have seen some selling pressure early during the day, but it is starting to fight back. My question isn’t so much as to whether or not we’re going to see a big move. I think this could set up for range-bound traders to take advantage of an obvious area between €25,250 on the bottom and €25,750 on the top.

Keep in mind that Germany has to worry about a lot of energy concerns as well.