Looking at the the 2/5 German curve. Feels like the curve has over stretched steepening during this sell off in Bunds. Should flatten with an other rally. Will monitor the curve to see if it sells off a little. Again just an opinion and not advice (I have no skin in the game).
Idiotism reloaded!? How long does this market believe in negative rates? Tick-tock... maybe sell this one in May, and not the stocks? Sooner or later ECB will change policy and normalize front end rates back to at least zero yield.
- Yield is back to minus 0,72-0,75 %. Retesting prev. broken downtrend line, 100wma and SenkouB level
First of all, this might be the driver for further EUR strength, which means EURUSD will trade much higher if the spread compression continues.
And dear Friends, there is obviously quite some room for the spread compression.
Upper-left chart -> Weekly US2y - Schatz spread:
- possibly a Head and Shoulders top
- bearish Heikin-Ashi signal
- Room to fall to...
In addition to the previous post on US/German 2 year yield spread, here I show you how it could really work from the german Schatz sell side!
This chart shows the German 2 year Schatz yield.
- Long term trend is bearish, but the trendline is coming lower. Right now the break point is around minus 70 bps. (-0,70 %)
- Ichimoku has BULLISH bias ahead: Senkou A is...
US 2y Note yield: 1,256 %
German 2y Schatz yield: -0,808 -> yes, it is still deep negative :-)
Spread between the two markets are at highs, trading around 205 basis points.
Reasons we all know: FED started to hike, while ECB is still sticking to its NIRP and QE policies. However this will change one day, and then the spread collapse will be quick and...
This chart is the yield difference between 2y (Schatz) and 10y (Bund) german bonds.
2y outright is trading at -0,83 % annual yield. (This means you have to PAY to Germans if you want to hold their debt for 2 years)
10y outright is at +0,33 % annual yield.
2y/10y spread differential is then +116 bps, (1,16 %). The fundamental reasons we al know. Schatz is trading...