The curve inverted | 11 Mei 2022

11 Mei 2022, EUR/USD

The curve inverted

EURUSD trading plan:

U.S. Treasuries have had their worst start to the year in history and the selloff in parts of the curve continued last week after the U.S. Federal Reserve hiked its benchmark overnight interest rate by 50 basis points and announced it would begin to trim its balance sheet next month to counter unabated inflation. Two-year yields, which are particularly sensitive to changes in monetary policy, have inched lower since the Fed hiked rates last week, and the yield curve between two-year notes and 10-year bonds has been steepening sharply, from 18.9 basis points before the Fed's hike to 44 basis points. That part of the curve inverted in late March and then in April, sending a warning sign for investors that a recession could follow.

Investment idea: sell 1.0578 and take profit 1.0514.

David Johnson
Analyst of «FreshForex» company
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