…Now, it’s moving higher as the market begins to think shorter term to raise dollar liquidity if the Bank of England is serious about ending QE, while, at the same time, Mario Draghi at the ECB wants to change course but can’t stop buying sovereign debt or those markets will implode.

Neither the euro-zone nor the U.K. economies can handle higher rates. Draghi hinted at removing his ‘put’ from the market and his comments had to be walked back the next day.

A widening U.S. 2/10 spread will put upward pressure on the dollar as domestic credit conditions tighten. Capital has been flowing into Europe post-French elections and Canada thanks to good, but, in my view, unsustainable GDP numbers associated with frothy housing conditions in major markets like Vancouver and Toronto…

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