When it comes to economic and financial indicators, many investors and analysts focus on the most widely publicized data. However, there are some lesser-known indicators that can provide valuable insights into the global economy. One of my favorites is the divergence between key US and German fixed-income benchmarks.
This indicator measures the difference in yield between the 10-year US Treasury note and its counterpart in Germany, which is also a benchmark for much of Europe. In recent trading sessions, this differential had risen to 200 basis points in favor of the US, a level that has only been reached three times since the beginning of 2020.
When looking at historical data, this 200 basis point difference is well above the low over the past three years of 90 basis points and is just short of the high of 214 basis points. This indicates a significant divergence between the two benchmarks and could signal important trends in the global economy.
By paying attention to lesser-known indicators like this one, investors and analysts can gain valuable insights that are often overlooked by mainstream financial media. This can help them make more informed decisions and potentially gain an edge in their investment strategies. So next time you’re looking for economic data, don’t forget to check out some of these lesser-known indicators that can provide valuable insights into the global economy.
