I can’t see the euro continuing to rally with eurozone sovereign yields so low.
US Treasury yields are falling today but eurozone sovereigns are chasing them right down the well. But US 10s still yield 2.26% while eurozone yields (and gilts) are a pittance.
- German 10s 0.748%
- French 10s 1.07%
- Spain 10s 1.92%
- UK 10s 2.01%
If you’re in that situation where you can buy US-dollar denominated bonds rather than these, I don’t see any case where that’s a bad idea.
If the ECB starts buying sovereigns, who is that going to chase out? I can’t imagine there are many people in German 10s that don’t have to be there.
The German govt making a quarterly distribution on 1m euros of German 10s
