The benchmark 10-year U.S. Treasury yield is facing renewed downward pressure from one of the oldest cross-asset signals – the copper-to-gold ratio.
After dropping to 0.11 (multiplied by 100), the ratio has briefly surged higher before continuing the downtrend. Although the signal is not as clean as it once was, a sharp turn might indicate a brief drop in the 10-year yield.
Copper/Gold ratio and 10Y Treasury Yield, Source: MacroMicro
Still Has a Pulse
Beyond the trading floors, the short momentum potential got academic backing too. Professor Dror Parnes from Texas AM University found that this ratio often contains short-term predictive information for the 10-year Treasury yield, typically over lags of one to five days.
