Macro Nugget: MAJOR tradeable gap opening between Germany and the US
The gap between trends in forward looking inflation indicators in Germany and the US is striking and increasing. This may be the most important macro trend right now..
We have been banging the drum on a potential sharp gap opening between inflation trends in the US and in Germany (or the Euro zone). The market has slowly but surely started to acknowledge the trend, but we continue to see traded inflation spreads as vastly mispriced given the forward looking indicators on inflation.
See the extreme divergence in the charts below
Chart 1: A small gap has opened in USD-EUR traded 10yr inflation
The gap between trends in forward looking inflation indicators in Germany and the US is striking and increasing. This may be the most important macro trend right now..
0 Comments