The spread between the German and US 10-year bond yield seems to have carved out a sideways channel this year. As of now, the channel resistance is seen at 244 basis points.
A break higher would imply resumption of the rise from November lows of 280 basis points. Tighter German-US yield differentials would be positive for EUR/USD.
So, I would look to buy...
have bund/treasury volatility telling us the future? could rates U-turn? it will take a coordinated effort of via the two main reserve currencies. can they do it? i say likely no. things may get better or maybe worse, we shall see
many of you have noticed what appears to be equity volatility in the us and hear the talking heads talk about inversion blah has the fed lost control blah. we're all gonna die, you know the usual. as we've noted in past entries we're feeling the effects of changes in the ECB's stance on going forward due to deflationary data from the eurozone. they've gone from...
Here we are tracking the completion? of an ABC sequence. This should attract buying interest in usual circumstances however alarm bells are ringing after the ECB could only go one month with the tap turned off.
Tracking these lows very carefully over the coming days with risk from Brexit, Meuller and Turkey around the corner.
All the best.
I expect both US10Y and DE10Y continue to rise.
But, the spread between the two countries may find resistance around 1.618 projection.
Under that scenario, I suspect EURUSD has bottomed at 1.1300 and could target 50% retracement of September 2018 high to Oct 2018 low at 1.1558.
The spectrum of a bear market always hovers on the financial markets, especially the stock markets and the bond market because that is where the dreaded contagion effect will come from. We all know that theoretically the stock market is positively correlated with the bond market, at least at 80% since the logic of the markets therefore explains, that the bullish...