#Japan remains the largest foreign holder of USTs. As #Japanese Govt bond yields rise, USTs may become less attractive to Japanese investors, particularly after the cost of hedging currency risk is taken into account, chart #NordeaMarkets

The US is a net energy exporter, while the euro area is a net importer. Europe buys #LNG at global prices, whereas US #gas trades at a fraction of the European benchmark, chart #NordeaMarkets

#FX
The #euro is struggling as the rate differential stops working in its favour and elevated energy prices erode Europe’s terms of trade, chart #NordeaMarkets

#euro area
There has been a modest uptrend in, for example, the 2y2y #inflation #swap rate this time as well, but so far the moves have been too small to worry the #ECB much, chart #NordeaMarkets

#FX
The #dollar -bullish picture could shift in H2 2027, as US #inflation comes off the boil and servicing US debt becomes a priority. The #AI boom could also slow later in 2027 or 2028 as leverage builds and the cost of capital rises, chart #NordeaMarkets