11 August 2016 at 13:00 GMT
- Eurozone bond yields continue to collapse
- Irish 10-year yield hits new low
- Spanish yield curve flattening
By Walter Kurtz*
Let's begin with the Eurozone where the broad bond rally has reached a feverish pitch as yields continue to collapse.
1. The Irish 10-year yield dropped below 40 basis points, a new low.
2. The French five-year bond yield moved deeper into negative territory.
3. Below is the Italian 10-year bond yield – approaching 1%. The second chart shows a new low for Spain's 10-year government bond yield – firmly below 1%.
4. Moreover, the Spanish government yield curve is rapidly flattening. The second chart below shows the shift over one week.
5. Government paper in the Eurozone is progressively issued at deeper negative yields. Here we have the German 10-year bund and the Italian one-year bill auction prices.
Turning to Food for Thought, betting markets are showing a rising imbalance in the US presidential election odds.
Moreover, there is a big shift in the probabilities of which party controls the US Senate after November.
— Edited by Michael McKenna
* Walter Kurtz is an alias
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