Yes, the steepening in the German yield curve can continue without a corresponding move in the Treasury curve. Whether it does depends partly on how the selection of the next ECB president plays out. The politics of the appointment still have a long way to go as Mario Draghi doesn't step down until October 2019. However, the appointment of Spain's Luis de Guindos as ECB vice president makes it more likely that Germany's Jens Weidmann, a hawk, will succeed Draghi as ECB president.
For investors, that could mean that any euro rate hikes are left until the new man is in the top seat. Which provides plenty of time for the ECB to be perceived as being behind the curve as inflation creeps higher. When that sentiment sinks in, a wider spread between two-year and 10-year yields is the safety valve, regardless of where Treasuries are going.
Source: Bloomberg Pro Terminal
Jr Trader Alexander Kumanov
25 Canada Square, Level 33, office 50, Canary Wharf London, E14 5LQ +44 20 3608 6256
World Financial Markets - 0700 17 600 Varchev Exchange - 0700 115 44
Varchev Finance Ltd is registered in the FCA (FINANCIAL CONDUCT AUTHORITY) with a passport in the United Kingdom: FCA, United Kingdom - registration number: 494 045, which allows provision of financial services in the United Kingdom.
Varchev Finance Ltd strictly comply with the statutes of the European directive MiFID (Markets in Financial Instruments). targeting increased efficiency, transparency and uniformity of financial instruments.
Varchev Finance Ltd is authorized and regulated by the Financial Supervision Commission - Sofia, Bulgaria: License number RG-03-02-05 / 15.03.2006
The information on this site is not directed at residents of the United States or Belgium and is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
Derivatives and margin trading involve a high degree risk level. You should not trade Forex and CFD unless you fully understand how it functions, what your benefits can be, what your risk is, and what you may lose. Please, note that the losses can be practically unlimited and that the initial deposit will not permanently limit the risk. You have to fully realize your financial status and make sure that trading in derivatives hides the risk of losing the entire amount invested. Invest only the amounts that you are able to lose.