We rarely see US and euro rates diverge as much as on Thursday, but the bullish move from the US won eventually. Nevertheless we see two very different rates markets, and thus seeing more days with diverging moves is likely. The Fed has many more cuts imminent, whereas the European Central Bank is in a holding pattern. At the same time the growth outlook for the eurozone is one of recovery, while jobs market woes dominate the US narrative. We still think the 10Y euro swap rate can drift higher over the near term and diverging moves like we saw today show that EUR rates may even manage this in a UST bull market. ... (full story)