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Age of switches: Rates sell-off, EURUSD down again, and Danish Nationalbank now buying DKK
The big sell-off continues on core rates. German 10Y yields are now at 0.45%, up about 40 bp since the trough just two weeks ago. The correlation between bond prices and stock prices was halted yesterday with Eurostoxx up about 0.5%. US stocks traded marginally up too. The reason for this sell-off is manifold in our view, see below under Rates. The Reserve Bank of Australia cut interest rates to a new record low of 2%. This is to ease the currency pressure and according to Governor Glenn Stevens the move is prudent as the inflation outlook provided ample opportunity for this move. Ahead of this week’s UK general ... (full story)