France cannot print its own currency, so a debt crisis there could force an ECB rescue that erodes the euro's purchasing power soon. If Paris cracks, Italy follows. France's 10-year spread over Bunds is 174bp versus Greece's 109bp despite its A+ rating, though 2011 Greece was much worse. Default risk is low; the ECB backstop is priced in, but intervention is uncertain and its TPI has conditions France may resist. x.com  x.com  x.com  x.com  x.com  x.com 

Rising French sovereign yields signal the disintegration of France and the EU/euro. France's 10-year yield is now above 5%, with an 8-9% target; EUR/USD's 1.12 level still acts as support, though it shows a huge negative divergence. x.com 

The US dollar appears to have finally cracked, which would be good for the euro and the yen, along with gold, bitcoin, silver, copper and bonds. x.com 

The dollar should strengthen as Trump goes on offense at the NATO summit, threatening Spain with trade penalties and demanding US control of Greenland. Such moves typically lift the dollar, hitting dollar-priced commodities and emerging markets. Allies will not fold publicly, but US trade threats tend to work behind closed doors. x.com  x.com 

Long-term Treasury yields keep climbing because investors increasingly doubt America enough to lend to it for 30 years, and nobody can force them to lend cheap. US debt is $40 trillion, interest costs over $1 trillion a year, more than the military, and the deficit is 6% of GDP during a boom. Treasury Secretary Scott Bessent's $4 billion buybacks are fake demand that fixes none of the overspending, a point Stanley Druckenmiller made in his op-ed "Let the Bond Market Speak." x.com  x.com  x.com  … Show more

The euro should grind higher against the dollar through 2026 as a more dovish Fed weighs on the dollar over the medium term, even though safe-haven flows support the dollar near term. EUR/USD stands at 1.1720, with the dollar index flat at 98.50. x.com 

The euro loses as the EU centralizes power in Brussels, which accelerates capital flight. Removing national vetoes on foreign policy, which Commission President von der Leyen backed on April 14 as a way to avoid systemic blockages, is the fifth such decision against diversification. It follows tighter stablecoin rules, crypto regulation under AMLR in 2027, a €10,000 cap on cash transactions and 212,000 banking jobs expected to be lost to AI by 2030. x.com 

The US dollar is unlikely to break out in the short term without a catalyst. An in-line PCE print pulled down 2-year and 10-year Treasury yields, the dollar index sits at major resistance at its May 2025 high, USD/JPY at 162 is a critical level for the Bank of Japan to defend, and currencies move slower than bonds. A reopened Strait of Hormuz would also help Europe and the euro recover, adding pressure; that favors short-term longs in gold and emerging markets. x.com  x.com 

The euro should stay resilient because higher European interest rates make it structurally far sturdier than the yen, especially with so many shorts placed against it. US selling of euros to buy yen was too small to overwhelm broader euro-bullish macro trends in a market trading over $7.5 trillion a day. x.com 

The US dollar is overvalued and weakening as Asian surplus countries stop recycling their surpluses into dollar reserves, an external drain. Without that recycling, both yields and the currency are in price discovery. Ken Rogoff concluded that Asia not recycling would mean a lower dollar against Asian surplus currencies and higher nominal rates, both now happening. Per @DrDavidKass, Ed Yardeni blames the global bond rout on the yen-carry unwind; the explanations are not mutually exclusive. x.com  … Show more