The short-end of the US yield curve has rallied a bit this morning while German paper is selling off. This looks to be contributing to the bid seen in EUR/USD as Europe squares up for the week.
Prior to the Greek safety-net, the 2-year spreads favored the US by 25 basis points. Today, the spread has shrunk to a bit less than 17 bp.
A 4 bp dip in the 2-year note yield in the US is helping prompt some profit-taking in USD/JPY. We’ve dipped back into the 92.40s after the rally sputtered ahead of 93.00.
