Markets

Wall Street

Wall Street Trapped In The Inability Of Yields

Many important assets have been trapped in broad trading ranges in recent years despite substantial political upheaval Some examples are the US Treasury 10-year yield which moved between 1.5-2.5% for 3 years or the German Bund 10-year yield between 0-1% for 3 year. According to BoAML, “this inability of yields, the US dollar & volatility
 to break out reflects the inability of the economic cycle to generate strong growth & inflation.”

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normality in interest rates

The Convergence Of Interest Rates After Euro Crisis

The fact the German bund (as well as the French bond) continue to offer significant yield differentials compared with the US bond, shows us we have not yet returned to complete interest rate normality after the euro crisis. But, since Macron’s elections as the President of France, the doubts over the irreversibility of the euro are dissipating.