Gold Slides to $4,262 as Hawkish Fed Rate Hike Triggers Technical Breakdown 
Banking scandal rocks Brazil’s politics and the country’s presidential election in October 
1 in 3 uni students experience serious financial hardship. Could concession cards for all help? 
Physicists zoom into the birth of cosmic rainstorms with new CERN study 
Synthetic data could ease people’s concerns about privacy breaches. But who gets to create it? 
What is Zionism? The different meanings of a contested term 
Unsustainable – or manageable? We don’t yet know how data centres will impact Australia’s environment 
AI is supercharging money scams – here’s what you can do to protect yourself 
Goldman Sachs Forecasts Fed Rate Hike as Inflation Risks Rise 
Add as a preferred source on Google
From April last to mid-May there was rout in bond market, mainly European bond market which saw German 10 year yield jumped from 0.05% to 0.75% taking the Euro along. Euro touched as high as 1.145 against dollar, up from 1.05 in March.
However Euro has diverged itself from 10 year bund yield. When ECB officials suggested front loading of purchase bund 10 year yield remained overall resilient while Euro dropped towards 1.11.
Euro dropped further towards 1.097 as core CPI improved in US in April, more than what market was expecting.
Why can't bund yields provide support to Euro?
- While 10 year bund yield is maintain around 0.65%, short term yields remain well anchored to negative territory. Bund yields are still in negative up to 4 years, with two year hovering below -0.20%. Similarly Euro based 3 month libor is well into negative territory. In short term Euro remains a funding currency to capture interest rate differentials.
- Dollar leg of EUR/USD from might have recovered from its slump with dollar index breaking above downtrend and now hovering around 96.3, up from 93.3.
Euro is vulnerable to reach 1.065 area once again, if dollar leg succeed in coming back.
