Markets are still trapped in a situation that goes beyond the usual analyzes and the correlations between the different markets.

Ten-year bond yields jumped more than 1.70% on Thursday as the rise continues with undiminished intensity and threatens stock stability. Even Fed chief's speech on Wednesday failed to stem the tide. Investors insist that the opening up of the economy will lead to rising inflation, and link it to the Fed's desire to keep inflation above 2.0% for a short period of time. Even the Fed chief's speech on Wednesday failed to stem the tide. Investors insist the reopening of the economy will lead to rising inflation, and put it down to Fed's desire to keep inflation above 2.0% for a short period of time.

However, it seems that behind the estimates for the increase of inflationary pressures, there may be other reasons that lead to the rise in interest rates. Recently there has been an assessment by J.P. Morgan that March is a month in which it is quite possible that there will be a restructuring of large portfolios to restore balance to the 60/40 portfolios, after the hyper- profits of recent months.

To this we must add the anemic demand at the recent 10-year US bond auctions, which boosted yields. This is normal and shows that the law of supply and demand works extremely well. At the same time, according to the chart below, the deafening rise in yields is driven by an aggressive closing of short positions in bonds. If the past is somehow a lead, bond yields may continue to move upward for the next period before reaching their highest level.

According to the above, big pension funds and other big investors, will be able to buy bonds at much more attractive levels and this increased demand could lead to a new downturn of returns.

Also, according to Bloomberg, at Thursday's conference where there was a new sharp decrease in bond prices, this may has been due to the closing of a short position worth $ 14 billion. Bloomberg concludes that it is quite possible that new short positions in treasuries have already been activated, a fact that confirms our above claim for the short-term course of bonds.

Traditionally, the rise in yields has been accompanied by the dollar’s fall, which usually precedes as bond sales are accompanied by sales in the US currency. However, the rise in yields also causes new buying interest and this could be captured in new capital inflows to the dollar.

Dollar is now at 2018’s levels and has also a similar behavior compared to then. As per previous analysis, there is a serious chance that there will be a new upward movement of the US currency.