Topic
The ten-year gap to Germany has widened 23 basis points since June with no rating action and no failed auction. European long duration is repricing for the same reason American long duration is, and a contested budget is the local excuse.
Bullion has risen 9.7 per cent in three weeks while long Treasuries fell, breaking a relationship that held for most of the past decade. The correlation between gold and the ten-year yield has turned positive, and that is the whole story.
Long-dated Treasuries sold off through a week in which the front end rallied, pushing the two-year to ten-year spread to 118 basis points. The move is about compensation for duration risk, not optimism about growth.
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