Germany-U.S. yield spreads have narrowed in a EUR-supportive way - Scotiabank

Ross J Burland FXStreet

Analysts at Scotiabank explained that fundamental releases are providing support with EUR’s European session rally driven by the release of unexpectedly strong PPI data out of Germany.

Key Quotes:

"The data should provide confidence to ECB policymakers ahead of the next policy decision on June 8, as they look to durable and self-sustaining gains in inflation."

"Forward guidance (‘or lower’ on rates) and the growth outlook (moving to ‘balance’ on risks) are the core focus for June."

"Germany-U.S. yield spreads have narrowed in an EUR-supportive manner and options markets are suggestive of a shift in the balance of risks with risk reversals (up to 3 months) pricing a premium for protection against EUR strength."

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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