Greece’s sovereign debt rating has been put on negative credit watch by S&P, pushing Greek yields higher versus German benchmarks. In a currency union, all the members should have similar credit profiles but in Europe, that is not the case. Greek 10 year debt now trades 230 basis points over German debt. Same story in Ireland. S&p has put the Emerald isle on watch for a downgrade as well.

This helps explain some of the recent negative price action in EUR/USD as it revives fears of the euro experiment coming apart at the seams.

Eurozone interest rates are falling fast with two-year yields ar record lows of 1.51%