We have something of a divergence in Eurozone and US rates on our hand. And while the divergence is not yuuuge, it’s certainly interesting. In the wake of last eve’s FOMC minutes the US Treasury yield curve flattened/inversed even more, with the 2y10y spread dropping below zero late yesterday before rebounding to 1bps this morning. At the start of the week we clocked the spread at 7bps. Furthermore, the 3m10y spread at minus 41bps is close to its cyclical low of minus 43bps. In OIS space the trough of the curve is at minus 98bps, down from 1.02 at the start of the week though still clearly above last week’s low of 0.91.

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