• 24 hours What’s Next In The Trump vs. Twitter Drama?
  • 2 days Escalating Tensions Could Crush $52 Billion China-U.S. Energy Deal
  • 3 days The Fed Is Printing Money At Unprecedented Levels
  • 3 days How Is The Real Estate Market Handling COVID-19?
  • 3 days Gold Flat As Markets Await Fed Chair Speech
  • 3 days What Is Day Trading And Is It Right For You?
  • 3 days Energy CEOs See Big Payouts Despite Oil Price Crash
  • 3 days Saudi Arabia Is Fighting A War On Two Fronts
  • 3 days 40 Million Jobless As Pandemic Fuels Economic Collapse
  • 3 days What Do India's Latest Reforms Mean For Its Coal Industry?
  • 3 days Copper Glut Continues To Grow
  • 4 days How A Pandemic Made Americans Better Workers
  • 4 days The Trillion Dollar Space Race Crosses Another Milestone
  • 4 days Gold Prices Fall As Stock Market Sentiment Turns Positive
  • 5 days Conspiracy Theories Set Tone For 5G Cold War
  • 5 days Working From Home Will Transform The Energy Industry
  • 5 days The Multi-Billion Dollar Race For A Vaccine
  • 5 days Can Domestic Tourism Bolster Emerging Economies?
  • 5 days Australia Considers $100 Million Investment To Kickstart Mining Industry
  • 5 days Has Re-Opening The Economy Been Successful?
The Problem With Modern Monetary Theory

The Problem With Modern Monetary Theory

Modern monetary theory has been…

Another Retail Giant Bites The Dust

Another Retail Giant Bites The Dust

Forever 21 filed for Chapter…

What's Behind The Global EV Sales Slowdown?

What's Behind The Global EV Sales Slowdown?

An economic slowdown in many…

Ashraf Laidi

Ashraf Laidi

AshrafLaidi.com

Ashraf Laidi is the author of "Currency Trading and Intermarket Analysis: How to Profit from the Shifting Currents in Global Markets" - Wiley Trading.

Contact Author

  1. Home
  2. Markets
  3. Other

Spreads and Sentiment

Putting aside hard and soft data, yield differentials continue to command FX markets as the German-US 10 year yield spread breaks above its 200-day MA for the 1st time since August to hit -1.90%. The story, however, is not only in the break of the average, but also in the fact that the formation of the spread consists of higher lows and higher highs since the December bottom, which is the same formation for EURUSD, gold and most "anti-USD" instruments.

German-US 10-Year Spread
Larger Image

The next key technical barrier for the spread stands at -1.70%, which marks the trendline resistance from the January 2015 highs. Much technical work remains to be done for euro bulls to secure lasting stability.

But with speculative euro futures positioning entering positive territory for the 1st time since 2014 and with these contracts, "sentiment" should further pick up for the currency due to the fact that the 22,399 representing net long contracts, is well below the 121,000 record high from 2007, which argues against the popular & often erroneous notion of improved euro sentiment being excessive.

 

Back to homepage

Leave a comment

Leave a comment