Browse Symbol Stacks: EEM: 20120724_EURUSD_vs_CDS.png (719×384)

20120724_EURUSD_vs_CDS.png (719×384)

The spread between Germany and USA 'risk' has risen notably since the EU Summit. This implicitly means the market is pricing in some level of acquiescence by Germany. At the same time, EURUSD has slipped dramatically lower as it appears that market believes that the EU is heading to some cataclysm reality (that implicitly does not include an unlimited German backstop).

Comments

Jerry_Cary_NCJerry_Cary_NC
For CDS discussion related to trusted governments, see GillianTett, FT, 23July12 7/24/12
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