German 2y Yield to go higher (US2Y vs GE2Y yield sprd too wide?)US 2y yield (blue line) vs GER 2y yield (red line)...The spread is immensely wide as the FED has been in a hiking phase wile the ECB still continues to apply a "whatever-it-takes policy".
Eventually the ECB policy will have to roll back and front-end yields will react by backing up.
I believe the German 2y yield will eventually move higher and lead the narrowing of the US-GER 2y spread gap.
This also makes the case for a Eurozone (i.e. German) curve flattener attractive at these levels.
