Many of us have our favorite economic and financial indicators. I’m referring to those indicators that don’t get a lot - if any - attention from the television channels geared toward finance and markets and yet can provide important insights. One of my favorites - the divergence between key US and German fixed-income benchmarks - is at a notable level.

More specifically, I’m talking about the difference between the yield on the 10-year US Treasury note and its counterpart in Germany (which also serves as a benchmark for much of Europe). In early trading Wednesday, this differential had risen to 200 basis points in favor of the US, a level only reached three times since the start of 2020. Moreover, and as shown in the chart below, it is now well above the low over the past three years of 90 basis points and just short of the high of 214 basis points.

QOSHE - American Exceptionalism Is on Display in the Bond Market - Mohamed A. El-Erian
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American Exceptionalism Is on Display in the Bond Market

21 1
04.04.2024

Many of us have our favorite economic and financial indicators. I’m referring to those indicators that don’t get a lot - if any - attention from the television channels geared toward finance and markets and yet........

© Bloomberg

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