Negative real yields on US government bonds | 21 August 2020

21 August 2020, EUR/USD

Negative real yields on US government bonds

EURUSD trading plan:

Negative real yields on US government bonds are forcing investors to increase their long positions on the European currency. The primary dealers in the government bond market expect a discount rate hike in 2024. Initially, bond market participants expected a rate hike in 2023. Laurie K. Logan, who is in charge of open market operations at the Fed, said market expectations for a rate change are logical. Such reverse of trend is negative for the dollar, as we will face a long period of negative real yields on US government bonds.

Trading recommendation: Buy 1.1860 and take profit 1.1914.

David Johnson
Analyst of «FreshForex» company
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