As things stand, there is arguably a slight divergence in terms of how hawkish the Fed and ECB are with the scale now favouring the latter. That is resulting in a further narrowing of the spread between 10-year US and German bond yields, to just 103 bps this week. That is the narrowest since August 2021 with this week seeing yet another sharp move.
The development here is arguably another tailwind for the euro at the moment, with EUR/USD looking to try for a break above 1.1000 again.
