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29 Dec 2014
Divergence in the bond markets renew EUR/USD pressure – Danske
FXStreet (Barcelona) - The Danske Bank Research Team explains that the divergence in the front end of US and European markets has brough renewed pressure on EUR/USD, which trades below the 1.22 handle.
Key Quotes
“The oil price has not yet recovered but Brent oil has traded stable around USD60 per barrel since 16 December, which has helped to reduce volatility across markets. This is not least visible in the Norwegian krone with EUR/NOK trading stable just above 9.00 during the holidays.”
“While the US bond market has seen selling pressure - with the 2Y Treasury yield trading above 0.7% and the 10Y Treasury yield rebounding back above 2.2% - the German bond market has traded stable with the 10Y yield around 0.6%.”
“Euro money market rates have come lower and the 2Y German government bond yield has fallen below -9bp. This divergence in the front end of the US and European markets has brought renewed pressure on EUR/USD, which is trading below 1.22.”
Key Quotes
“The oil price has not yet recovered but Brent oil has traded stable around USD60 per barrel since 16 December, which has helped to reduce volatility across markets. This is not least visible in the Norwegian krone with EUR/NOK trading stable just above 9.00 during the holidays.”
“While the US bond market has seen selling pressure - with the 2Y Treasury yield trading above 0.7% and the 10Y Treasury yield rebounding back above 2.2% - the German bond market has traded stable with the 10Y yield around 0.6%.”
“Euro money market rates have come lower and the 2Y German government bond yield has fallen below -9bp. This divergence in the front end of the US and European markets has brought renewed pressure on EUR/USD, which is trading below 1.22.”