PLW - The Dollar Looks Like It Wants To Run

• It would appear that the U.S. Treasury market is supported by Japanese and eurozone money, as there is simply no yield available in either German bunds or Japanese Government Bonds, which makes the 120 bp positive Treasury 2-10 spread a mouth-watering opportunity to a European or Japanese financial institution.
• It's not about the fact that U.S. yields are negative after inflation, which is running at 5% year over year. It is about the fact that Japanese or European financial firms can borrow near zero and buy Treasuries and realize a positive carry trade, even on a currency-hedged basis.
• Another reason why the dollar may be firming could be the dramatic decline in the growth rate of M2 money supply, which at last count is running at 13.8%. In February, it was growing at 27.1%.

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