You guys have done a great job at sorting this out.. I was going to jump in and add how it's important to make sure how the bonds chart you are looking at is printed (their value vs their yield, which is probably the most confusing part) but you guys already have that covered.
The only thing I can add is on the USDX comments.. correlations or not, USDX == DX contracts on ICE, and thus, it's good to know what actually makes up DX:
https://www.theice.com/productguide/ProductSpec.shtml?specId=194
And specifically, the weighting of the USD vs the following currencies and weighted within DX as such:
Euro (EUR), 57.6% weight
Japanese yen (JPY) 13.6% weight
Pound sterling (GBP), 11.9% weight
Canadian dollar (CAD), 9.1% weight
Swedish krona (SEK), 4.2% weight and
Swiss franc (CHF) 3.6% weight
So it's VERY Euro weighted... this is mostly since the DX first came about in the 70's and back then the Euro was all different currencies and the weighting was far more spread out between each pair.) Not to mention that Asia, while still important, wasn't as large of a trading partner to the US back then as it is now.
SO... (US)DX up == Dollar up, and the rest down... thus, people are running for safety to the all mighty dollar. (But it could also mean they are running into USD from overseas trades in order to BUY US bonds that yield well. Think about it: An institution in Germany has to convert their Euros into USD first, before they can purchase USD based bond, thus giving upward pressure to both USD and bonds at the same time. So your own analysis on why USD is increasing in value has to come into play. It's not always perfectly linked as straight risk on vs risk off.)
Hope that helps.
The only thing I can add is on the USDX comments.. correlations or not, USDX == DX contracts on ICE, and thus, it's good to know what actually makes up DX:
https://www.theice.com/productguide/ProductSpec.shtml?specId=194
And specifically, the weighting of the USD vs the following currencies and weighted within DX as such:
Euro (EUR), 57.6% weight
Japanese yen (JPY) 13.6% weight
Pound sterling (GBP), 11.9% weight
Canadian dollar (CAD), 9.1% weight
Swedish krona (SEK), 4.2% weight and
Swiss franc (CHF) 3.6% weight
So it's VERY Euro weighted... this is mostly since the DX first came about in the 70's and back then the Euro was all different currencies and the weighting was far more spread out between each pair.) Not to mention that Asia, while still important, wasn't as large of a trading partner to the US back then as it is now.
SO... (US)DX up == Dollar up, and the rest down... thus, people are running for safety to the all mighty dollar. (But it could also mean they are running into USD from overseas trades in order to BUY US bonds that yield well. Think about it: An institution in Germany has to convert their Euros into USD first, before they can purchase USD based bond, thus giving upward pressure to both USD and bonds at the same time. So your own analysis on why USD is increasing in value has to come into play. It's not always perfectly linked as straight risk on vs risk off.)
Hope that helps.