Archived IMT (2010.03.25)

GE-US 10 YIELD SPREAD at 3-YR LOW. Compare these TWO CHARTS:

On February 11, we bolstered our case for $1.32 EURUSD based on this chart http://chart.ly/eqbf3x highlighting our negative outlook for the German-US 10 yield differential, which stood at -0.50%, while EURUSD was at $1.38 at the time. Today, the GE-US spread has worsened to -0.73% http://chart.ly/faea8w and EURUSD dropped to $1.3270. Readers of this website were constantly reminded of our negative outlook for the German yield disadvantage being instrumental in guiding EURUSD towards $1.30 and $1.28. Looking ahead, we expect the spread to reach to -0.90s and help break EURUSD below $1.30.