Latest / The European Economy Podcast with Fexingo: ECB, Eurozone, and Continental Markets
Why the Strong Dollar Is Crushing Eurozone Bond Markets
Lucas and Luna dissect a striking anomaly: the U.S. dollar has weakened slightly to 1.14 per euro, yet Eurozone government bond yields are diverging sharply—Germany's ten-year bund yield has fallen to 2.1% while Italy's BTP yield rose to 4.3%, the widest spread since 2022. They trace this to a paradox: as the ECB hints at an early exit by Christine Lagarde amid French political turmoil, investors are fleeing peripheral debt, punishing Southern Europe while rewarding German bunds. Lucas contrasts the strong-dollar narrative with actual FX data, showing that the trade-weighted dollar…
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