The euro-dollar curve is reversed: it has not produced by subprime mortgages

Even though all investors' eyes are focused on the long end of the yield curve, which is stabilizing more and closer to the index levels of an incoming recession, for the first time since the beginning of the financial crisis. euro dollar to have reversed. This means that in 2020, easing the monetary policies of the Federal Reserve is more likely than easing it. It contrasts sharply with the expectations of members of the central bank board: the majority is expecting one or two rises in 2020.

Seeking signals on the state of health of the economy and to anticipate the next evolution of the Fed, investors are increasingly observing the curves between two and ten years and between five and thirty years. But as you remember Bloomberg the gap between the euro contracts in December 2019 and the following year fell below freezing for the first time yesterday. This means that short-term speculators do not expect the US central bank to raise rates after 2019 . On the contrary, as we have seen, the market is now more likely to reduce the cost of money rather than increase it. In short, the gap between the Fed's hopes and market expectations is increasing more and more.