Eurostoxx futures -1.6% in early European trading

The softer tones carry over to Europe as risk stays more subdued

  • German DAX futures -1.3%
  • UK FTSE futures -1.3%

The decline in European futures is more measured, even when you put together the drop in the cash market yesterday – as compared to US stocks.

While convexity hedging may be part of the backdrop in the bond market, global steepening and a rise in real yields everywhere is a strange one when you consider that the reopening theme is following different timelines for each country/region.

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The fact that yields are surging despite breakevens slipping this week tells the story that this is more than just a buff in inflation expectations. Adding to that is real yields jumping by nearly 40 bps now from the lows seen a the start of the month. Ouch.


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By Jonathan Prop

Jonathan Prop is an independent financial advisor. He has been working in finance for the last 20 years. After retiring early in his 40s, Jonathan decided to help others get to grip with financial markets, particularly his area of expertise - forex!

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