NOT A TRADING ADVICE! ONLY FOR EDUCATION PURPOSE...
On the age of era where the shine of Angela Merkel wastes away, EU faces big risks not only external but also internal.
1- COVID-19 which is a global issue
2- EU-US trade which I expect to see more tension if Trump wins for second term which is high likely
3- EU-CHINA relations shadowed by US-China trade war and concerns about China's ambitions, going see more action during 5G tenders
4- EU-CHINA relations shadowed by China's action in Hong-Kong and islands on open sea
5- Eurosceptics in the union supported by far-right and conservative parties (see Poland's latest election)
6- Local tension risks in Belgium, Spain, Italy
7- EU decision system and sharing wealth problems (FRUSAL FOUR (Sweden, Austria, Denmark, Netherlands), Germany and other northern EU countries)
8- Risk of more EXIT attempts after UK
9- BREXIT
10- US attempts to isolate Russia and energy independence of EU
ITALIAN vs GERMAN 10Y Spread and EURUSD
It seems ITALIANS are successfully pegged to GERMAN BUNDS, however spread may still increase.
https://invst.ly/rfmm0
CME COT reports show that EURO FX open interest is 593,341 contracts each €125,000. We see 103,597 speculative (non-commercial) contracts in long position however 155,130 contracts of commercial are in short (for hedging - most likely).
Graphical link is below;
https://www.tradingster.com/cot/legacy-futures/099741
Similarly CME COT report for 3M EURODOLLARS shows how market is aligned neutral.
Graphical link is below;
https://www.tradingster.com/cot/legacy-futures/132741
I strongly believe that even EU solves her problems about COVID-19 support funding if they manage to get an agreement with FRUSAL FOUR, there are still high risk areas for EU. Furthermore, I believe EURO's strength comes from being used as funding currency in carry trades and it benefits because of USD weakness.
Spread between US10 YEAR and GERMANY 10 YEAR.
https://invst.ly/rfmv2
As seen on the chart, I expect to see the finalization of GREEN II correction which is an ABC.
This week we have ECB meeting and EU discussions related to COVID-19 supports . Also US data will define the strength of USD.
On the age of era where the shine of Angela Merkel wastes away, EU faces big risks not only external but also internal.
1- COVID-19 which is a global issue
2- EU-US trade which I expect to see more tension if Trump wins for second term which is high likely
3- EU-CHINA relations shadowed by US-China trade war and concerns about China's ambitions, going see more action during 5G tenders
4- EU-CHINA relations shadowed by China's action in Hong-Kong and islands on open sea
5- Eurosceptics in the union supported by far-right and conservative parties (see Poland's latest election)
6- Local tension risks in Belgium, Spain, Italy
7- EU decision system and sharing wealth problems (FRUSAL FOUR (Sweden, Austria, Denmark, Netherlands), Germany and other northern EU countries)
8- Risk of more EXIT attempts after UK
9- BREXIT
10- US attempts to isolate Russia and energy independence of EU
ITALIAN vs GERMAN 10Y Spread and EURUSD
It seems ITALIANS are successfully pegged to GERMAN BUNDS, however spread may still increase.
https://invst.ly/rfmm0
CME COT reports show that EURO FX open interest is 593,341 contracts each €125,000. We see 103,597 speculative (non-commercial) contracts in long position however 155,130 contracts of commercial are in short (for hedging - most likely).
Graphical link is below;
https://www.tradingster.com/cot/legacy-futures/099741
Similarly CME COT report for 3M EURODOLLARS shows how market is aligned neutral.
Graphical link is below;
https://www.tradingster.com/cot/legacy-futures/132741
I strongly believe that even EU solves her problems about COVID-19 support funding if they manage to get an agreement with FRUSAL FOUR, there are still high risk areas for EU. Furthermore, I believe EURO's strength comes from being used as funding currency in carry trades and it benefits because of USD weakness.
Spread between US10 YEAR and GERMANY 10 YEAR.
https://invst.ly/rfmv2
As seen on the chart, I expect to see the finalization of GREEN II correction which is an ABC.
This week we have ECB meeting and EU discussions related to COVID-19 supports . Also US data will define the strength of USD.