Can’t keep the euro down
There is talk about some big unwinds of bets on bunds and against Treasuries today. Trades that were initiated in late October.
German 10-year yields are up 4 bps today as part of a broad European fixed-income selloff. Meanwhile. US 10s are down 1 bps to 2.33% as risk aversion dominates.
The spread had been widening (in the US dollar’s favor) since September but has backtracked in the past couple weeks.
The correlation in day-to-day moves with the euro has been low lately but it’s always there in the background.