Archived IMT (2010.02.11)

The spread between German and US 10-year yields fell to the lowest since July 2007 at -0.49% (representing GE-US spread). SEE CHART http://chart.ly/eqbf3x The latest jump in US yields to 3.72% following Bernankes exit strategy speech (see yesterdays IMT) combined w/ falling Eurozone yields is adding to euros downside from a yield spread perspective. Today's euro rebound despite no concrete plan for Greece out of the EU lacks the fundamental legs to continue beyond $1.3770s. The cyclical pattern of the GE-US spread suggests further declines ahead into the Spring.