European weakness should mean the long end of yield curve stay low as the ECB raises the refi rate. Just as for USD recently, EUR barbelling now seems appropriate.
Bond Outlook [by bridport & cie, November 9th 2005]
To the two reasons for recent dollar strength, profit repatriation and relatively attractive yields, can now be added the French riots and fear of them spreading to other European cities. All three are temporary effects, assuming the French situation does abate and Trichet makes good on his near-promise to raise the ECB’s refi rate. |
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