Macro Digest: Wrong? US Dollar update....

"Hard to say what's right when all I wanna do is wrong." 
― Prince

US Dollar view update: The negative US dollar which is really a call for US rates to fall more than German - not outright short US Dollar is out of the money by 2% BUT.... the trade is working in Fixed Income as Germany yield is now moving relatively higher than US - if this continues we should see impact on US dollar as well.... 

- ECB is a zero now - Long end should sell off as inflation expectations rise... See chart below....
- Germany Budget today sounds hawkish on "Germanic approach" to growth and budgets... balanced budget...
- Still awaiting news on Draghi future... follow Italians news.

For now I am with Prince - however note how US yield is coming down faster...(rising slower....)

 

10 Yr. US minus 10 Yr. Germany Index to 100 on day of US Dollar short call….

 

 

10 Yr. US / 10 Yr. Germany Index to 100 on day of US Dollar short call….

 

 

 

EURO inflation Swap 10 YR vs. EURUSD….. will it be inflation expectations which drives EURO from low?

 

 

US 10 Yr still most "expensive or highest yielding" vs. G-7 yield structure – chase for yield?

 

 

Steen

 

Med venlig hilsen  |  Best regards
Steen Jakobsen  |  Chief Investment Officer

 

Saxo Bank A/S  |  Philip Heymans Allé 15  |  DK-2900 Hellerup
Phone: +45 39 77 40 00  |  Direct: +45 39 77 62 23  |  Mobile: +45 51 54 50 00

 

Research: http://www.tradingfloor.com/traders/steen-jakobsen

Please visit our website at www.saxobank.com

 

This email may contain confidential and/or privileged information.
If you are not the intended recipient (or have received this email
by mistake), please notify the sender immediately and destroy this
email. Any unauthorised copying, disclosure or distribution of the
material in this email is strictly prohibited.

Email transmission security and error-free status cannot be guaranteed
as information could be intercepted, corrupted, destroyed, delayed,
incomplete, or contain viruses. The sender therefore does not accept
liability for any errors or omissions in the contents of this message
which may arise as a result of email transmission.