The decline in the U.S. curve has sent the 10-year yield German Bund-Treasury spread to narrow to the lowest point since 2014, rising above -100bps
This rise equates to about 105bps from the 2022 lows of -240bps, which comes to break the 2020 peak
The differential will support a higher EUR/USD view, however, we have seen the currency rate disconnected from interest differentials
The last time the Bund-Tsy spread was this narrow, EUR/USD was trading closer to 1.30, this about 20BF higher from current spot levels
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