Bond yield curves | 11 April 2022

11 April 2022, EUR/USD

Bond yield curves

EURUSD trading plan:

The recent, albeit brief, U.S. yield curve inversion when two-year yields pushed above 10-year yields was a warning to the markets, as that move is considered a harbinger of recession. The two-year/10-year German curve segment has steepened this year - meaning 10-year yields have risen faster than short-dated ones. Indeed, it is among the steepest globally. That move seems counterintuitive, however. The Ukraine military actions will inflict more pain on euro zone economies, given their closer economic ties and reliance on Russian energy. This is a negative signal for the European currency.

Investment idea: sell 1.0920 and take profit 1.0855.

David Johnson
Analyst of «FreshForex» company
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