The FX Files – “We Didn’t Start the Fire”

Into the start: Real yields are pushing nominal yields higher in the core space. In Europe, the rout in bonds continues. Sovereign spreads in the long-end are blowing up with 10-year BTP-Bund now at 163bps (from 138 bps pre-ECB). GRD-Bund spreads are now at 232bps (from 188bps). The 10-year Eurozone GDP weighted yield is now at 80bps (from 52 bps). In other notes, S&P 500 futures are down so far. Energy prices are backing off from highs made on Friday. In FX, the AUD and CAD are outperforming so far (+0.40% and +0.30% against the USD). Chinese markets reopened after a week-long break and closed higher on the session (both CSI 300 and SHCOMP).