Rates Spark: Heavy Treasuries and tight eurozone liquidity
EUR/USD — All Desk Targets
| Firm | Stance | YE 2026 |
|---|---|---|
UOB | Bullish | 1.1800 |
ING | Neutral | 1.1700 |
Rabobank | Bullish | 1.1800 |
From the original
US Treasuries remain under pressure. It's a slow grind, but the net direction remains up in yield, and in particular in long yields. Front-end yields have been reacting lower to the weaker data. But the back end has other things on its mind. In the eurozone, the decline of excess
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4 itemsRates Spark: Heavy Treasuries and tight eurozone liquidity
US Treasuries losing the control they had
Lead — The desk posits that US Treasuries are experiencing a destabilizing shift, characterized by rising real yields that may indicate a structural, rather than a temporary, trend. Per the full note [source], the US 10-year yield recently surged to 4.65%, exacerbating concerns about the overshoot in Treasury markets, which could negatively impact FX trading dynamics. With our FX coverage indicating a mixed outlook on the EUR/USD, GBP/USD, and USD/JPY pairs, traders should be mindful of moving yields as a fundamental backdrop. The upcoming absence of critical market events could amplify this volatility as traders react to market shocks.