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14 May 2015
Forex news: Rising Bund yields supporting EUR – SG
FXStreet (Barcelona) - Kit Juckes of Societe Generale, mentions that the short-term correlation between EUR/USD and Bund/Treasury spread remains strong, and rising bund yields are keeping the single currency bid.
Key Quotes
“The further rise in Bund yields is keeping EUR/USD bid and the short-term correlation between the Bund/Treasury spread and EUR/USD remains strong. Until Bund yields peak, we can't think about calling a top in the Euro. The winners though, should continue to be currencies around the edge of the Euro Area - i.e., SEK, NOK in G10, and CEE currencies.”
“The Bund/Treasury move ‘justifies' or at least helps explain the move in EUR/USD pretty well, but Gilts/Treasuries doesn't justify the latest GBP/USD spike. Hence, we will be keener to short GBP than EUR.”
Key Quotes
“The further rise in Bund yields is keeping EUR/USD bid and the short-term correlation between the Bund/Treasury spread and EUR/USD remains strong. Until Bund yields peak, we can't think about calling a top in the Euro. The winners though, should continue to be currencies around the edge of the Euro Area - i.e., SEK, NOK in G10, and CEE currencies.”
“The Bund/Treasury move ‘justifies' or at least helps explain the move in EUR/USD pretty well, but Gilts/Treasuries doesn't justify the latest GBP/USD spike. Hence, we will be keener to short GBP than EUR.”