(Italy-Germany 10-Year Rate Spread)
EURUSD bulls now facing another risk from the bond markets. Italy’s 10-year rates rises to %1.164, the highest since July when Italy was facing serious Covid-19 risks and the economy was almost completely shut down. The recent jump cause Italy-Germany yield difference to %1.27 and broke the months-long flat zone to the upside. Usually, this spread does not fully correlate with the EURUSD but when sharp rises occur on the 10-year spread, EURUSD tends to decline to the downside.
