Shame on the Bund

It’s been almost three weeks, but we might finally see a backtest of the SMA10 if ES isn’t able to hold its neckline at 2940.Why now, when the Q2 close is right around the corner?  Blame it on the German 10Y.

As we approached the end of Q1, the US 10Y bounced for almost two months — propping up the USD and thus stocks. But, back then, Bunds were around -4bps.

This time around, Bunds are at -33 bps.  The US 10Y bounced for a grand total of 3 days before slipping back below 2%.

Our yield curve model has been eerily accurate for well over a year. I don’t expect that to change any time soon.

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