EUR/USD risk reversals adopt a bearish bias
|- Increased demand for EUR puts.
- 10Y US-German yield spread rises in US positive manner.
The EUR/USD one-month 25 delta risk reversals fell to -0.05 yesterday, indicating increased demand for the bearish bets (Puts) on the common currency.
Risk reversals
Yield differential widens
Also, the 10-year US-German yield spread rose to 209.5 basis points (bps); the highest level since Apr. 12. The widening of the spread in the USD-positive manner indicates the EUR/USD could extend the decline from the recent high of 1.1961 to 1.1709 (61.8% Fib R of Nov. 7 high - Nov. 27 high).
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