10 yr Bond yields - BullishAcross the board 10 year bonds look scary. The italy 10 yr is so clear i figured id publish it. Same with Cadanian 10 yr, US 10 yr. Central banks must be shitting themselves. It'll be an interesting next week or 2.
IT10Y trade ideas
ITALY 10Y BTP YIELD INCREASING TO 5.25%Within the EURO AREA considering the TARGET 2 balances of participating Central Banks, up to July '22, Italy boasted the LARGEST DEFICIT €-640 billion EURO a MONSTRE DEFICIT IN THE FINANCIAL ACCOUNTS, that hinders overall ITALY BALANCE OF PAYMENTS, considering that the country could eventually achieve a Balance of Trade surplus that it's a tiny amount compared to the €-640 billion EURO TARGET 2 DEFICIT, much larger than GREECE € -109 billion EURO.
Institutional Investors and the bond market, in general, will continue to see a considerable DEFAULT RISK or some sort of Sovereign Debt YIELD CURVE Distress in the EURO AREA, where ITALY's SOVEREIGN DEBT EXPOSURE ARE AT RISK OF SOVEREIGN DEBT HAIRCUT AND RESTRUCTURING, that will have a ripple effect on Institutional investors and debt holders.
The risk-free rate 10Y BTP YIELD will rise to 5.25% to reflect a much higher risk premium of SOVEREIGN DEBT RESTRUCTURING AND DEBT HOLDERS HAIRCUT.
10y Italy US flashing EZ debt sustainability questions Over the past 2yrs, 10y It US has move little over 175Bp higher. It coincided with the Euro dropping over20BF and EurChf breaking down to well below parity again. Note, that it took a similar jump in rate spread in 2012 to accelerate the inverse correlation to EurUsd.
If It 10y breaks above 100bp vs 10y US Italy will need to sign up to an ESM program as the ECB anti fragmentation tool will prove to be insufficient to assure markets.
Strong dollar until euro zone and china econ improve? $dxy $uup Could it be that the strength in the DXY dollar index will continue until euro zone debt distress subsides and Chinese economic conditions improve?
UUP DXY FX:EURUSD AMEX:GLD
Italy 10 Year BondSun Storm Investment Trading Desk & NexGen Wealth Management Service Present's: SSITD & NexGen Portfolio of the Week Series
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European creditwe're starting to see divergence in European credit spreads again, so wanted to publish this so that we can all follow along as this theme continues to evolve.
10y Treasury yield & 10y BTP yield highly correlatedThe U.S. 10y Treasury Yield and the 10y BTP yield have been correlated in their drift upward that will see both the Sovereign debt securities being priced within a Yield range 3.15%<3.68%, in order to discount persistent inflationary pressures in the economy, while also Central Banks would try to stabilise monetary policy for a high inflationary economic environment with many unknowns going forward.
In this environment of Sovereign debt yields correlating to economic growth and macro-economic factors, the yield spread differential between the 10y Treasury yield and the Spanish 10y Bonos yield, of 94 basis points seems highly out of place and a clear Sovereign debt market mispricing. The Spanish economy has no match for the U.S. economy, and insofar the spread differential does not reflect at all, the material economic factors and economy sizes. The 10y Bonos Yield 1.96% still lower than 10y U.S. Treasury yield 2.90% for a 94 basis point spread differential. This represents evidently a bond market mispricing, due to ECB indiscriminate yield curve compression, that could then result in an arbitrage opportunity, if not, clear Sovereign debt security price action correction that will have to see the 10y Bonos Yield clearly reflecting the real strength of the Spanish economy, compared to the U.S. and frankly to the Italian economy.
In our opinion, the Spanish Yield curve it's completely flowed making Bonos debt largely mispriced. The 10y BONOS YIELD, if priced correctly at the market, should be much higher than the U.S. Treasury and even of the 10y Italian BTP yield.
Thereby, won't be a surprise out of the blue to see a consistent SELL-OFF in Spanish sovereign debt that would reflect the debt market risk and the Spanish economy output potential and strength as in fact only Spain Debt/GDP ratio = 118.4% in 2021, there's no way the Spanish Sovereign Debt yield curve can be as low and mispriced.
IT10Y: Inverted Continuation H&SDaily Pattern: Inverted Continuation H&S
Activate Buy on 22 March
For now its a good retest
10YBTP DISCOUNT PRICE AND CHART TECHNICALS PROVIDE A BUY SIGNAL The 10y BTP Italy's benchmark Sovereign Debt has been discounted below par with other Sovereign Debt securities, in a sign of Sovereign Debt market broader repricing. The outflows from Sovereign Debt markets have in all probability helped to fuel the reckless allocation to stocks seen in these weeks.
In our view, these excessive speculative activities in stocks propped up by Wall Street's blindfolding narrative of increasing and excessive risk-taking involving also European stocks could be at a turning point.
In fact, most of the Sovereign Debt available do yield above the 2.0% inflation target, thereby those Bond yields could start to become interesting from a risk-reward standpoint, considering that a 2.0% yield with a 0.95% semestral coupon rate could in any scenario provide a satisfactory edged cashflow against inflation. In fact, the cumulative 2.0% Yield and 0.95% coupons can provide compounded exposure to coupon cashflows above Inflation for the medium and longer-term.
In the same camp, U.S. Treasuries yielding above +2.0% could start to become an effective hedge against inflation in the medium to longer-term, in fact, the 20Y Treasury auction has seen increasing interest by Bond Funds and Institutional Investors in getting their bond portfolios secure +2.0% yields for the longer term.
In the coming week, it could be a possibility to have large and consistent OUTFLOWS FROM STOCKS, while instead Institutional Investors and large Investment Fund could start reallocating toward Sovereign Debt.
The BTP chart from a technical standpoint provides a clear view of the oversold conditions in the below-par Sovereign Debt price of € 89.91. On similar prices, technical levels and market conditions, a flurry of buyers took advantage of the discounted Sovereign debt security Yield of 2.0% and semiannual coupon rate of 0.95%. The chart also highlights a wide price/volume gap that would need to be repaired with the BTP price probably drifting above par to €101.5<€102.
Reload Italy 10y BTP shortPlease note, that this ia a yield chart, which means an upward move in yields is bearish in terms of BTP futures.
After reaching our initial bearish target, BTP yield retraced to daily Kijun Sen and is trading now at a very good risk/reward support zone, where we start to re-establish short bond positions to a 1,35-1,40 % target.
We will put on larger size in case price action confirms in form of a HA reversal signal.
BTP/Bund spread and Italy 10y yieldFor the non FI experts: I put this post out as a SHORT Investment strategy, which means sell the 10y Italian bond (BTP) futures. Only in terms of yield charts it is a bullish picture as yields rise when bonds are sold.
Left panel: weekly chart of BTP/Bund (Italy 10y over German 10y bond) yield spread
Right panel: BTP Italy 10y yield
The yield already delivered an upside break on the daily chart. Retested support and possibly gives another bullish signal today or tomorrow. Please note that anything up in yields means a sell and a BEARSIH action in Bonds!
Do the math, and start to think about what happens if BTP yield closes back above 0,80 % and same time let's say the risk premium increases, pusing the ridiculously low level of the BTP/Bund spread back above 115-120 bps.
I start to believe that BTP will become a much better strategic short than Bund.
Italy 10Y Bond YieldI expect 10yr Italian Govt Bonds Yields to slowly drop toward area 1,05/1,13 thanks to the purchase program of ECB. They shall not skyrocket again until next government crisis, or Covid return, or major problems of the EU.
long term ITALY GOVERNMENT BONDS 10 YR YIELDlong term ITALY GOVERNMENT BONDS 10 YR YIELD
if the price breaks the downtrend line we will have a nice uptrend
#IT10Y - #ECB is BANKRUPT Part 3 #Italy #EURUSD @lagarde @ecbIn the short term, the ECB can still fight against the capital flight from Italy government bonds, but it is powerless against the capital flight out of the euro.
The ECB's new bazooka won't help, Mrs Lagarde.
As you can see in the chart, if 3,00 and later 3,85 falls, everything is done and dusted - the trader world will see that too.
Look at RSI on monthly base!!!
Best regards from Hannover (Lower Saxony)
Stefan Bode
#IT10Y - #ECB is BANKRUPT Part 3 #Italy #EURUSD @lagarde @ecb
#IT10Y - Bancruptcy of Italy and ECBThe ECB cannot get a grip on it and the 10-year Italian government bond is quoted at 17.8% p.a. on 19 March 2019.
Not only is Italy bankrupt, but also the portfolios of the government bond holders are disappearing into thin air, above all the ECB and pension funds and insurance companies.
Not funny.
BAILOUTS FOR GOVERNMENTS ARE THE REAL PROBLEM!I SEE MANY PEOPLE COMPLAINING ABOUT BAILOUTS FOR THE PRIVATE SECTOR!
HOW ABOUT THE REAL PROBLEM: BAILOUTS FOR GOVERNMENTS!
I WOULD BET MY LIFE SAVINGS THAT THE ECB WILL GUARANTEE THAT ITALIAN (AND EVERY OTHER EUROPEAN NATION'S) BOND YIELDS REMAIN SUPPRESSED BY SACRIFICING THE VALUE OF THE SAVINGS OF EVERY PERSON IN EUROPE!
UNTIL GOVERNMENTS ARE ALLOWED TO DEFAULT, WE WILL CONTINUE A STEADY MARCH TOWARDS GLOBAL COMMUNISM!
WESTERN CIVILIZATION, THE FREEST AND MOST PROSPEROUS COLLECTION OF INDIVIDUALS IN THE HISTORY OF THE PLANET, WAS BUILT ON PRIVATE SAVINGS ACCRUED THROUGH EXCESS PRODUCTIVITY (ACCUMULATED CAPITAL)!
THE RIGHTS OF THOSE INDIVIDUALS AND THE VALUE OF THAT CAPITAL IS ON THE VERGE OF DESTRUCTION!
Italian spread to GermanyItalian political uncertainty pushing spreads out. This is one to watch and feels like there is more to go.
BTPs - Italy vs EU Clash Deepens, Bonds under pressureBTPs will continue to remain under pressure as the EU has rejected Italy's budget proposal
and Draghi has also issued a warning. Italian spreads are soaring and bonds will come under
intense scrutiny.
BTPs - Lower on the Anticipation of a Clash with BrusslesThe Italian Government sent the aggressive budget proposal to Brussels, with Finance Minister Tria suggesting he can "explain" things to EU counterparties and receive acceptance. Market participants know it's a long shot, and BTPs should come under more pressure.
EURUSD Vs Italian Yields"Italy must 'calm down' and stop questioning the euro: Draghi" ~ Reuters
Last week we learned that Italian yields was what halted the euro from moving higher, technically. As these issues continues to brew within the eurozone, observing the negative correlation of these two pairs is worth noting. Italian yields isn't far from 4%. Whichever way the pair goes, a new low for the euro will be supported near 1.1375 area.
