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Re: German vs US 10 year yields - help me understand?
Recent thread on this subject: viewtopic.php?f=10&t=156308
"Eurozone inflation is low to negative, and the Euro has cratered against the dollar. If an investor expected those trends to continue"
It does not seem to be the case that the market expects both of these trends to continue.
"countries that are clearly worse credit risks than the US - Italy, Spain - have 10 year yields that are lower than the US."
The market apparently expects that the ECB will backstop these countries, as it has said it would, essentially eliminating credit risk.
"Eurozone inflation is low to negative, and the Euro has cratered against the dollar. If an investor expected those trends to continue"
It does not seem to be the case that the market expects both of these trends to continue.
"countries that are clearly worse credit risks than the US - Italy, Spain - have 10 year yields that are lower than the US."
The market apparently expects that the ECB will backstop these countries, as it has said it would, essentially eliminating credit risk.
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- Posts: 12073
- Joined: Fri Sep 18, 2009 1:10 am
Re: German vs US 10 year yields - help me understand?
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Last edited by letsgobobby on Sat Nov 09, 2019 3:36 am, edited 1 time in total.
Re: German vs US 10 year yields - help me understand?
The trade you're talking about might be happening with the long bond. Look at TLT lately, it's been hotter than Texas tarmac in August. I'm wondering what this will do to mortgage interest rates this spring, as I have a house to sell. Kind of hoping for a feeding frenzy.
"My bond allocation is the amount of money that I cannot afford to lose." -- Taylor Larimore