Goldman Sachs analysts say the proposed French and German stimulus fund for 500 billion euros ($ 547 billion) will “bypass” eurozone government bond yields for now and fuel a sharp drop in Italian and Spanish borrowing costs.
“The spread between yields on 10-year German and Italian government bonds is expected to narrow to less than 180 basis points, levels that were last traded in March.
The difference between German and Spanish rates is expected to fall to less than 90 basis points from current levels of 121 basis points. “
In a context of firmer start-up in European equities and falling European bond yields, the EUR / USD consolidates the rise below 1.0950. The general weakness of the dollar in the midst of risk adds to the optimistic tone of the moment.