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EUR/USD jumps as US Treasury steps up longer-dated buybacks
Danske Bank said the 10-year Treasury yield fell from Tuesday’s peak, with the 10Y sitting at 4.64% and 10 basis points below that high.
Danske Research Team, via FXStreet, said EUR/USD spiked higher after the US Treasury increased buyback volumes of longer-dated Treasury securities, a move that helped flatten the bond curve.
The note pointed to the impact on US rates, saying the 10-year US Treasury yield is at 4.64%, about 10 basis points below Tuesday’s peak, even as the transmission of the US move to Europe was only partial.
Danske also cited ongoing activity in Europe’s primary market, noting that issuance remains active with plenty of SSA and covered bond deals as the currency reaction plays out.
On the policy and inflation backdrop, the team referenced the FOMC July minutes as containing no major surprises and said views on inflation diverged among participants, while it described euro area inflation as confirming a 2.9% year-over-year headline pace and 2.5% core inflation.
Latest closeEUR/USD 1.157 ▲0.4%