Short-rates dominant but long-spreads hard to ignore
The ECB decision and payrolls release from last week had material consequences, not only for EURUSD but for rate markets. While the perceived ‘tightness’ of the ECB helped overnight indexed-swap (OIS) spreads rebound to near end-2014 highs, the
robust US jobs print drove the 10-year US-Germany government bond differential a near-8 year low. EURUSD is ignoring the latter spread, but for how long?
Read the full report: UBS