European problems are not going away. Last week was the worst week so far this year for key US and European equities and the US and German rates markets responded accordingly with a bid. That the US/German yield spread is testing the lows of this year is a telling sign for Europe. It reflects the problems highlighted by the bearish break in Spanish yields, which have reached their highest level for the year. In terms of FX, the focus is expected to be on a lower EUR over the coming sessions.
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Barclays Capital