Euro Stoxx 50 Trades At 13 Year High As Bund Yields Consolidate Near Pandemic Highs

GERMAN AND US 10YR YIELDS: 1 DAY TIME FRAME (OCT. 2019 – MAY 2021)

Yields, Bund Yields, Treasury yields, TradingView

Chart created by Izaac Brook, Source: TradingView

While the moves in Bund yields have mostly tracked the moves in the US 10yr Treasury, the yields on the two have diverged in April. While the 10yr Treasury has pulled back from the highs above 1.75% to currently trade back around 1.56%, Bund yields are continuing to trade around their pandemic highs.

This slight divergence might be explained by increasing economic optimism in Europe compared to the continued optimism exhibited in the US. Continued strength in US data has likely made another stimulus bill less likely than initially thought, potentially driving a reassessment in Treasury yields as less supply is now expected. Whatever the reason, a convergence or continued divergence may send important macro signals as the global recovery gains steam.

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