InterMarket R-EView

Short reviews of four of the largest global markets: US Interest Rates, US Dollar, Commodities, and US Equities and how they inter-act with each other. What does this mean to investors is added for context.

LayLine Asset Management Inc

Harry J. Campbell III, CMT

4/14/26

Interest Rates

All three Rates covered (5yr, 10yr, 30yr) are flat to slightly lower on the month, but noticeably higher than in the beginning of March as war broke out in the Middle East. Before the war Rates were meandering lower since hitting cycle highs in May of 2025; the 5yr was at 4.17, 10yr was at 4.63, 30yr was at 5.15.  Currently, the 5yr is at 3.89, 10yr is at 4.27, and the 30yr is at 4.88.  Rates across the curve are lower now than about a year ago. 

The good news is that Rates are lower, the difficult part is that all three Rates are in the technical process of establishing varying degrees of upward trends.  The 30yr is clearly in a short term uptrend that started last October with the classic pricing structure of higher highs and higher lows.  The 10yr did not put in a lower low, but it was close, so combined with consistently higher highs since its low last October, it’s still in an uptrend of sorts, just not as strong as the 30yr.  The 5yr put its low in when the war began in March so it’s too early for a trend indication.

If you are wondering about the longer trend indications, if the 30yr rises above 5.153 before it puts in a lower low, technically that would signal a longer term uptrend.  If the 30yr goes below 4.528 before putting in a higher high, technically that would indicate the beginning of a downward trend in Rates.  Currently the 30yr is at 4.879, pretty much in the middle of the two levels.  Similar analysis can be applied to the 10yr.

 US Dollar Index

To suggest that nothing happened to the US$ b/c it is only slightly higher than when the war began, would be misleading.  In actuality, for the full month of March up until April the US$ went up in value, significantly in currency terms.  Since the end of the month, the US$ as weakened by the same degree it strengthened, but in half the time.  Sometimes referred to as, escalator up, elevator down. 

The US$ will play an influential role in the global economic aftermath of the war.  With all the caveats it deserves, oil is mostly traded in US$ and as such a weaker US$ will increase the global price of oil and a stronger US$ will decrease the global price of oil.  The challenge is that the US$ has both gone up and down during this war.  Considering the repercussion of higher or lower energy cost on the global economy, the strength or weakness of the US$ will be closely monitored.

Commodities

It is always difficult to look at commodities as an economic sector (indexing) when energy is not only a very large percentage of the index product makeup, but energy is also a large cost in the production of many commodities, think electricity and aluminum.  However when you add the complexities of new rounds of tariffs, two wars (Ukraine and Iran), and a building shortage of global energy supplies, commodities are going to be exceedingly difficult to get a read on.

Normally (whatever that is at this point in time) we would expect higher energy prices to feed into inflation, pressuring consumer prices and manufacturing costs higher.  However, this time around the idea of demand destruction pressuring prices lower cannot be discounted completely.  The demand destruction would result from not just rising prices on consumption in general, but the immediate rise in transportation costs (hard to substitute in the short term) would require consumers to cut back on spending elsewhere in the budget. Left to their own device, higher prices reduce spending and demand, eventually lowering prices (high prices are the cure for high prices).  Lower prices eventually increases demand, increasing spending and allowing prices to rise.  The catch is that both demand destruction and inflation can once unleashed, spiral out of control.  Something that needs to be avoided.

US Equities

To borrow from a phrase used above, since February, US Equities took the escalator down and the evaluator up.  It took US Equities 2 months to go down about 10% and about two weeks to make it back and close near an all-time high. 

This earnings season Fundamental analysts have their hands full with: spillover concerns from the private credit markets, a major dislocation in the supply of global energy with a wide variety of potential outcomes to decipher, none of which look promising, and there are the negative economic outcomes from the price shock from higher gas costs on consumers spending habits, both domestic and international.  This will pressure profit margins for many companies with a combination of less revenue from slower consumer spending and higher production costs related to higher energy prices.  In addition, the war with Iran adds another layer to the fundamental complexity we are likely to see throughout this earnings season.

On the Technical front comes the heading, you don’t see that every day.  Last week US Equities gapped (opened higher) from below the 200-day MA (moving average of prices) to above the 50-day MA, which was at a much higher level, in a single day.  Technically, that’s a show of strength and the follow through over the next four days supports that observation. 

After a strong moves like this, technically we can expect a retest of the 50-day MA at some point in the future.  Another technical consideration is that markets tend to close gaps, in our case a close below the low side of the gap, as part of a retest of the this strong move up.  At current levels, closing that gap would also result in a retest of the 200-day MA.  A closing of the gap and a hold of the 200-day MA would position US Equities for a strong move up.  Obviously, any failures along the way will be technically a challenge for US Equities to deal with.

What Does This Mean To Investors?

In summary; Rates are trending higher, the US$ is trending sideways, commodities are trending higher, US Equities are back near record highs.  Still not a great combination for growth.  What this means to investors remains the same, for everyone’s sake, let’s hope that the war ends quickly.

LayLine Asset Management Inc

Harry J. Campbell III, CMT

3/24/26

Interest Rates

All three Rates covered (5yr, 10yr, 30yr) continue to rise since the beginning of the month. The 30yr is up ~.30 %, the 10yr is up ~ .38%, and the 5yr is up ~ .56%.  Of note, the shorter term Rate, 5yr, has risen more than the longer term Rate, 30yr.  The FED did not change the FED funds Rate at their meeting last week, so it is telling that Rates rose and the 5yr rose more than the 30yr.  The message from the market, the FED is not likely to be cutting the FED funds Rate while the 5yr charges higher.

Something to consider, while the FED is still arguing about whether to continue to cut Rates, the market has already voiced its position.  The move up in the 5yr indicates that there is growth in the economy but the rise in the 10yr and 30yr indicates the market is still quite concerned about inflationary pressures in the system.  A cut in the FED Funds Rate seems difficult to justify under the circumstances.

However, the markets are positioning for Rate hikes, not cuts, to quell inflation while the economy is strong enough to handle higher FED funds Rates. This leaves the Rates markets at odds with those that are more concerned about growth and less about inflation, and then there is the stagflation (high inflation - low growth) group who are not sure what to push for, higher Rates to fight inflation or lower Rates to support growth.

Over the next couple of FED meetings we should get a hint as to what side of the Rate fence, growth (cut) or inflation (hike), they are going to end up on. 

US Dollar Index

The US$ continues to move higher since the end of January.  A more interesting point of interest is the rise in the US$ since the tariffs were struck down (2/20/26) and since the war with Iran began (2/28/26).  It would appear that the combination of the two events has increased demand and activity in the US$.  Since the beginning of the month the daily price range in the US$ has noticeably widened out, suggesting more trading activity.  Prices are up suggesting demand for the US$.  Reading between the lines, under the current circumstances international investors and corporations still view the US as a good, and safe, place to do business, requiring foreigners to first convert their currency to US$ to invest in the US, increasing demand for the US$.

Commodities

The GSG continues to rise very quickly, notwithstanding yesterday, pushed up primarily by oil prices.  What’s interesting is that the US$ has been rising during this time, which should hold commodity prices level or lower.  Clearly commodities are responding to the supply and demand dynamics related to the war in Iran and tariffs, and unrelated to the US$.  Whether it’s a shortage of helium or fertilizer or oil, the effective closing of the Straits of Hormuz (Iran) has cut off supplies of necessary commodities to the global economy.  Assuming that global commodity demand is maintained and these supply disruptions (putting it nicely) continue it will result in higher prices for most of the basic inputs of the global economy.  This does not help the FED out in their inflation fight.

US Equities

US Equities continue the decline that started around the 1^st of February, but has quickened its pace lower since the end of February with the start of the war with Iran.  US Equities are down to the same level as last September, i.e. no real capital gains for the past ~7 months.

The Fundamentals are almost set for the 1^st quarter earnings season.  The most interesting aspect to look forward to is perhaps the forward guidance for revenues and earnings, both the coming quarter and for the year ahead.  Speaking of earnings, the SEC (Securities Exchange Commission) is examining the possibility of moving to biannual corporate reports from the current quarterly reporting period used now.  That would certainly change the Fundamental Analysis reporting landscape.

On the Technical side, US Equities has dropped below its 200-day MA (moving average of prices).  The 200-day MA is an important measure of trend that also serves as a line of support or resistance. When prices are above the 200-day MA it serves as a level of support and when price is below the 200-day MA it serves as a level of resistance.  Points of support keep prices from going lower, and points of resistance keeping prices from heading higher.  It can be said that when price breaks through a strong level of support or resistance, signifying a possible change in trend, that breech needs to be challenged to confirm a break in trend.  US Equities are in that process as we speak.

What Does This Mean To Investors?

In summary: Since the war with Iran started; Rates have risen substantially, the US$ has risen in value, commodity prices are up dramatically, and US Equities continue to show weakness.  Not a great combination for growth.  This means for investors the same thing as last time, "for everyone’s sake, let’s hope that the war ends quickly."

LayLine Asset Management Inc

Harry J. Campbell III, CMT

3/10/26

Interest Rates

All three Rates covered (5yr, 10yr, 30yr) are higher so far this month, reversing about half of the drop in Rates during February, putting Rates about in the middle of a strengthening sideways channel.  Rates are also about at the same level as when the tariffs were first announced back in April 2025.  Rates did rise immediately following the announcement of the tariffs, hitting cycle highs in May before starting to trend lower to where we are now.  Interestingly, it was thought at the time that tariffs would be inflationary, pushing up inflationary pressures that would force the FED to raise Rates, slowing the economy.  Instead the FED ended up lowering Rates last fall.  Conclusion, tariffs did not affect Rates over the longer term.  The FED is meeting next week to decide what to do with the FED Funds Rate, most think it will not change. 

Part of InterMarket Analysis is considering the impact of war on the InterMarkets.  War impacts the costs to the economy by pushing up both Rates and commodity prices.  Rates have risen and commodity prices are up since the war began.  It will be telling what the FED says next week about the effect of war on their decision on Rates.

US Dollar Index

The US$ strengthened when the war was announced and has continued its strengthening cycle that commenced in late January.  Oil is traded in US$ (for the most part) and given the sharp increase in oil since the war started, it makes sense that demand for the US$ would increase as more expensive oil was bought and sold requiring more US$ to cover the increased transactions, pushing up the value of the US$. 

However, the US$ is still in the middle of a long sideways channel that goes back to the start of the tariffs.  Keep in mind that the US$ dropped from near historical highs down to the range we are in now in the first half of 2025 and has trended sideways since.  The impact of the war on the value of the US$ is far from certain, but for the moment the US$ appears to be strengthening.

Commodities

As would be expected at even the hint of war, much less a break out of fighting, commodities are going to rise, in this case particularly petroleum products, and they did.  Oil jumped from the mid $70 last Wednesday to over $110 on Monday morning and then back down to the mid $70 by today.  Shorter term commodity price increases will be absorbed by the economy, by both producers and consumers, however, the longer commodity prices remain elevated and the US$ remains strong, over time, the more worrisome a spike in inflation gets.  This will certainly make the FED Rate decision next week more complexed.

The GSG is now higher than it was when it peaked in early 2022 and we need to go back to late 2014 to find higher commodity prices then today, at least on the index level.  This means that for the past 12 years overall commodity prices have been lower than they are today and yet we have had a rather substantial bout in inflation during that time.  To the causal observer it would appear that lower commodity prices do not hold inflation down, or to put it another way, commodity prices were not the cause of the inflation of the past decade or so.

US Equities

US Equities continue to drift lower since hitting a recent high in late January.  The start of the war has added some haste to the downward trend. 

Normally we would discuss fundamentals, revenue growth or earnings estimates, however, the length of the war will challenge any current analysis   For example, if over time oil remains extremely elevated, it would cause a reduction in consumer derived revenues and reduce earnings due to the increased costs associated with much higher energy costs.  Earnings season starts again in April, it will be interesting to hear forward guidance.

Technically, US Equities are below their 50-day MA (moving average of prices) and have challenged it from below several times only to be repelled. In technical jargon that is referred to as confirmation of downward pricing pressure.  US Equities are positioned halfway between the 50-day MA above and the 200-day MA below.  The 200-day MA is for many a level of support, that proverbial line in the sand, that requires attention.  As a reference, US Equities have not been below its 200-day MA since May of last year.  The translation is if US Equities trades lower than the average of its prices over the last 200 days, it is losing momentum and support from investors.  We are not there yet, but its being watched very closely.

What Does This Mean To Investors?

From an InterMarket point of view all that really matters is what has happened since the war started: Rates are rising, the US$ is strengthening, Commodity prices are higher, and US Equities are showing some weakness.  What this means for Investors, for everyone’s sake, let’s hope that the war ends quickly.

LayLine Asset Management Inc

Harry J. Campbell III, CMT

2/24/26

Interest Rates

All three Rates covered (5yr, 10yr, 30yr) have been moving lower since the beginning of the month. They have each moved down roughly the same amount, about 25 basis points (basis point is 1/100 of a percent) or ¼ of a percent each. That may not sound like a lot, but when you look at the corresponding price move in the underlying bonds, especially long dated, its noticeable. Looking at the TLT, (iShares 20 Year plus Treasury Bond EFT that moves similar to the 30yr) so far in February the price of the TLT has risen ~3.2%.  So a one quarter of a percent move down in Rates, specifically the 30yr, resulted in a ~3.2% move up in price of the TLT. An example of small moves in Rates can result in large price changes in the underlying bonds.

In case you are wondering, a quarter of a percent move in one bond will not result in the same price move in different bond that moves the same quarter of a percent, there are way too variables.  In the example above both the 5yr and the 30yr moved down about a quarter of a percent during February.  However, while the price on the TLT moved up 3.2% in price as a result of the drop in Rates, the IEI (iShares 3-7 year Treasury bond ETF that moves similar to the 5yr) is up only .8%.  The same quarter point move down in Rates resulted in vastly different price moves over the same period of time.  The complicated nature of pricing bonds makes it quite difficult to judge price from moves in Rates except, as one goes up the other goes down.

US Dollar Index

The US$ has been tracking sideways, with an upward bias, for the month of February.  The current short-term down trend that started in late November continues for the moment, but since late January a short-term reversal trend, upward, has been developing.  We have the higher low, but need the higher high to confirm a change in the short-term trend.  There is still quite a bit of work to be done to the upside to reverse the longer-term down trend for the US$ that started in early 2025.  Technically, the 50-day MA (moving average of prices) is below the 200-day MA and both are trending down, not a confidence building formation if you are looking for a stronger US$.

Commodities

After moving lower for the first part of February, the GSG has moved up aggressively to challenge the prior high from late January.  In other words, the upward trend in commodities that commenced around the time when the tariffs were first announced in April, not only continues, but has gained Technical strength since the 1^st of the year.  It will be instructive to see how commodity prices adjust to the new tariff regime, but given the insane level of complexity injected into international trade by these changes in tariffs, it will take some time to culminate in a price trend in commodities.

US Equities

US Equities are now at about the same price as late last October, four months ago.  Lots of ups and downs, but no real progress in any direction.  Markets that are flat like this for some period time are often referred to as a consolidating market.  Market participates are waiting, biding their time, for indications if things are going to get better, worsen, or stay the same so they can buy, sell, or hold.  These consolidation periods can last a long time, a year or more in some cases.  Consolidation phases generally (I’m sure there is an exception) take place after long and substantial moves up in US Equities.  For example, after the strong move up from early 2012 to the beginning of 2015 US Equities basically went flat from the beginning of 2015 until the end of 2016 before moving higher again.  To be clear, during that long flat there were several sharp moves down and then back up, but no real progress made for almost two years. Some consolidation phases don’t end well suggesting that market participants during the consolidation phase determined the market had gotten too expensive and needed to be repriced. Consolidating markets are frustrating to get through, requiring investing patience.

What Does This Mean To Investors?

Rates moving lower even as inflation has strengthened suggests market concern about economic growth.  With the US$ biased to the downside it makes sense that Commodity prices are on the rise, adding to market concern.  US Equities are flat, waiting for something to happen before making its next move.  What this means for investors is, patience is a virtue.

 LayLine Asset Management Inc

Harry J. Campbell III, CMT

2/10/26

Interest Rates

Since the beginning of the month all three Rates covered (5yr, 10yr, 30yr) have drifted lower, but they remain about flat year to date.  Looking back a year, the 30yr is about flat but both the 10yr and the 5yr are lower than they were one year ago.  For perspective, almost exactly one year ago both the 5yr and the 10yr were at cycle highs, the 10yr at 4.66 and the 5yr at 4.5.  Today the 10yr is at 4.14 and 5yr is at 3.69.  The 30yr did not hit its cycle high until late May at 5.15, currently at 4.78.

The reason for the short history lesson is to draw some conclusions from the last year.  1) The 30yr was flat therefore it concluded there has been little in inflationary impulses from either monetary or fiscal support for the economy.  2) The 5yr is lower, the conclusion here is that there has not been enough economic growth to stimulate demand for credit necessary to lift short Rates. 3)  The 10yr is also lower over the last year concluding that there was little inflationary impulses over the last year b/c there was not enough economic activity to support higher prices or push Rates higher.

US Dollar Index

The US$ is exhibiting some technical weakness including the negative implications of lower lows and lower highs since last November, and the 50-day MA (moving average of prices) has failed to hold a cross above the 200-day MA and is now trending lower.  This shows a classic lack of confidence in the idea of a strengthening US$, at least for the moment.  That is, its hard to develop any consensus on the direction of the US$ until there is some stabilization in global trade related to the US tariffs.  The US$ current round of weakness coincides to the introduction of US tariffs last year.  It can be looked at in one of two ways; one is that the tariffs reduced the demand for the US$ as non US$ denominated goods and services were sought out as alternatives to US goods and services.  The other is the increase in costs associated with the tariffs has reduced overall US destined trade demand.  Either way it’s going to be a challenge for the US$ gain much strength as long as the tariffs are in place.

Commodities

The GSG is responding to the weaker US$ by moving up well above the upper side of the sideways channel it had been tracking in for several years.  Since the beginning of 2026, commodities have risen sharply just as the US$ has weakened noticeably.  Commodities do respond to more than just the US$ (i.e. supply and demand), but the US$ is weaker than it has been for some time and that weaker US$ (pushes prices higher) has combined with the added costs associated with tariffs and commodities are responding by moving higher. 

US Equities

US Equities may be making new record highs, but the slope of the rise in US Equities is and has been flattening out.  Slow progress comes to mind.

Fundamentally, we are about 2/3 of the way through earnings for the 4^th quarter and they are coming in in line with most expectations.  EPS (earnings per share) in the 4^th quarter grew about 13%, with revenue growth coming in around plus 9%.  If you are wondering, estimates for 2026 earnings growth is about 14% and the forward P/E ratio (price/earnings) at around 22, which is above the 5 year average, and as such, US Equities remain fairly expensive.

Technically, US Equities continue trending upward, even if that rate of change is slowing.  The 50-day MA has maintained its position well above the 200-day MA, a positive technical indication.  However, the lack of higher highs and higher lows since the beginning of the year suggest some trepidation to pushing prices higher.

For those interested in market lore (not advice), the popular saying “as goes January so goes the year” suggests odds are for a positive year ahead. 

What Does This Mean To Investors?

In summary, the Rates market is not concerned about inflation and that the economy is challenged.  However, US$ weakness and tariffs have cued up higher prices, as evidenced by the higher commodity prices, challenging the Rates position on inflation and US Equities are still trending upward, albeit at a slow pace, challenging the Rates markets view on a challenged economy. What this means is that when the InterMarkets are out of sync, Investors need to watch closely for any sudden attempts for them to sync up.

References:

5yr: 5 Year Treasury Yield (FVX)

10yr: 10 Year Treasury Yield (TNX)

30yr: 30 Year Treasury Yield (TYX)

US$: On 9/24, Switched from Invesco DB (Deutsche Bank) US Dollar Index Fund UUP to DXY, ICE US Dollar Index.

GSG: On 2/11/25, iShares S&P GSCI Commodity Index replaced the DBC: Invesco DB (Deutsche Bank) Commodity Index Tracking Fund, as our commodity index.

Yield Curves: The difference between the 5yr and 10yr, and between the 10yr and 30yr.

FED: Federal Reserve

ECB: European Central Bank

US Equities: S&P 500

EURO: Eurozone Currency

YEN: Japanese Currency

IMF: International Monetary Fund

CMT: Chartered Market Technician

Copyrighted 2026, LayLine Asset Management Inc