Overview
Ideas
EUBUND trade ideas
ECB October Meeting Could Start TaperingQuote:
"A hawkish ECB has placed German bund yields squarely in the spotlight
Once described as the “short of a lifetime” by the likes of bond gurus Jeffrey Gundlach and Bill Gross, bets on German government bond yields, or bunds, heading higher have preoccupied the minds of investors who highlight the divergence between German and U.S. bonds.
Yet, talk of investors wagering for the gap to narrow have gathered momentum recently.
What’s the catalyst?
European Central Bank President Mario Draghi has hinted that a more substantial discussion of the tapering of the ECB’s €60 billion ($71.7 billion) monthly asset purchases at its October meeting. Many investors have bet on that yield differential to narrow, with many wagering for the value of bunds to fall, pushing yields higher."
Source: www.marketwatch.com
Opinion: The multi year support of financial markets with QE's and QQE's could come to an end. Usually stockmarkets react to steps like this with short term or medium term falling prices.
Remind Bill Gross Prediction: "Short of a lifetime"It was an April 21th 2015. when Bill Gross made his famous call:
"Gross: German 10yr Bunds = The short of a lifetime. Better than the pound in 1993. Only question is Timing / ECB QE"
Source: mobile.twitter.com
Quote: "Bunds were yielding 0.94 percent in Tuesday (On April 21th 2015) morning trade, up 19.8 percent on the session but down nearly 83 percent year to date.
Traders have been piling into the nation's debt ever since European Central Bank President Mario Draghi announced his intention to commence U.S.-style quantitative easing , a debt-buying program aimed at keeping yields low and goosing the financial markets with liquidity."
Source, with Video: finance.yahoo.com
Opinion: As now everybody might know the Fed is expected to tell on wednesday, September 20th 2017, how to reduce it's huge balance sheet. Expected is a 10 billion drop monthly in Q1 2018. Also expected is that the fed will add 10 billion each quarter. In Q4 2018 the fed is expected to lower it's balance sheet by 50 billion USD monthly. It is unlikely that the ECB not to start tapering in the next 6 month. Bund Yields should rise, the EURO BUNDFUTURE should drop now. Maybe it's not a short of a lifetime, but after a 2 years sideways range it is becoming a short now and it's unlikely that stockmarkets are going to like it.
2 key levels that should be watchedThe price seems to get under kijun sen line in small timeframes, and is around tenkan sen in 1 day timeframe. I think that the price might bounce on the "tenkan sen resistance" and get uptrend again. For those interested to watch this, keep an eye on kijun sen line on small timeframes and if the price crosses the kijun line while up in small timeframes then that should confirm an uptrend at least for some hours or days.
Bunds Bouncing Up?Bunds have not been able to break below this key trendline (blue) which has served as the support for this move since 2014.
The path of least resistance appears to be to the upside with a major resistance area pretty far above @ ~180.00. Both the top of the current channel as well as a major trend line connecting the '94 and '99 highs (green)
