News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
Wall Street
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • The Japanese Yen is eyeing the upcoming Bank of Japan rate decision and CPI figures, but JPY crosses will likely remain dependent on broader market sentiment. Get your weekly $JPY forecast from @FxWestwater here: https://t.co/x9rbQpPfWe https://t.co/2x1R5XTVea
  • Consolidation or bull flag? A bull flag is a continuation pattern that occurs as a brief pause in the trend following a strong price move higher. Learn how to better spot these formations here: https://t.co/yOEvLjKnct https://t.co/uCaWQiu4Ly
  • Crude and Brent oil are on track to extend higher as Gulf Coast supply disruptions and a positive OPEC report bolster sentiment. Uranium is on a massive surge, aided by the famous Wall Street Bets group. Get your market update from @FxWestwater here:https://t.co/XrpV0jcy8e https://t.co/g2To3LmUah
  • RT @michaeljburry: Read thread.
  • The Australian Dollar has retraced from August lows when looking at AUD/JPY and AUD/CAD. However, the AUD/NZD downtrend is intact, will a reversal there appear as well? Find out: https://t.co/8LmgqLLGJO https://t.co/AueigVsuk4
  • The S&P 500, Dow Jones and DAX 30 could be at risk of falling as retail traders continue increasing their upside exposure in these indices. What are the key technical levels to watch for? Find out from @ddubrovskyFX here:https://t.co/OJByiwIppr https://t.co/P1iOONG90N
  • The US Dollar continues to hold its ground against most ASEAN currencies as recent downtrends lose momentum. What is the road ahead for USD/SGD, USD/THB, USD/PHP and USD/IDR? Find out from @ddubrovskyFX here:https://t.co/UcleaZEAaW https://t.co/62bGLvt8fE
  • The Canadian Dollar has been caught in broad ranges against the Euro and the US Dollar, but can the upside bias in USD/CAD and EUR/CAD prolong? Find out here:https://t.co/8DubboXsjv https://t.co/A0sIYo2iP1
  • Want to hear my thoughts on the US Dollar? Check out yesterday's recording with #AuzBiz hosted by @KaraOrdway on 'The Trade' We discussed a #USD index, Treasury yields, $USDJPY, $AUDUSD and $NZDUSD https://t.co/yxwquL1btp https://t.co/RtWjlN6kpv
  • Gold has plunged nearly 5% off the Monthly high with the sell-off now probing key weekly support here at 1738/47- looking for a pivot here with the Fed interest rate decision on tap. Get your $XAUUSD market update from @MBForex here:https://t.co/Vnxi41lETt https://t.co/FyZuHNzsU3
Guest Commentary: Are German Bunds finally heading for the big slide?

Guest Commentary: Are German Bunds finally heading for the big slide?

George Dorgan, Financial Analyst, and Portfolio Manager, snbchf.com,

Citibank judges that the Swiss National Bank (SNB) does not need a peg anymore. The EUR/CHF exchange rate would be now over 1.20 even if exposed to the free market. Yesterday we showed that the upwards move in the EUR/CHF is just the behavior of some euphoric Forex traders. In the meantime we see a completely different pictures, as for bond yields:

German Bunds - Swiss Eidgenossen Spread Again over 1%: Long-term investors piling back into Swiss franc

Paulsen bet already in March that Germany is willing to pay all remainders of the debt-financed 2002-2007 consumption run in the struggling European nations, even if Merkel insisted on the contrary for months. Many more hedge funds have joined Paulsen and are betting on rising German Bund yields. PIMCO has removed German Bunds from their recommended investments.

Some hedge funds even expect the euro crisis to last another 20 years (as we agree in an earlier post). This would give German finances a hard life. Therefore more than half of the hedge funds expected Bund “yields to double within a year". Most recently Vontobel warned clients not to put too much emphasis on German Bunds that investors perceive still as "safe."

Due to the guarantees to the ESM, the EFSF and the costs of Commerzbank bad bank, a think tank expects German debt to increase from 81% of GDP to 83% this year. This despite the low borrowing costs. It is the second institute that reduced the German growth expectations for 2013 from 2.2% to 0.8%. The result: An even higher GDP to debt ratio.

Guest_Commentary_German_Bunds_Finally_Slide_body_Picture_1.png, Guest Commentary: Are German Bunds finally heading for the big slide?

Chart: German BOBL Future between April and September 2012

The first consequence of the Bund sell-off is that the yield spread between 10 yr. Eidgenossen and the German Bunds jumps over 1% again. A clear sign that some long-term investors are moving out of German Bunds not only into peripheral bonds, but also into Swiss Eidgenossen. Still at the end of July the spread was only 0.80%, at the beginning of June 0.65%. German investors fear inflation and debt (more details here).

The German BOBL Future (5 years) is falling to levels not seen since April. Currently the Swiss 10 years Eidgenossen is trading at 0.66%. On August 30th before the recent CHF depreciation it was at 0.50% and on June 1 at 0.52%. The 10 yr. German Bund stands at 1.71% (on August 30th at 1.56%, on June 1 at 1.17%).

Guest_Commentary_German_Bunds_Finally_Slide_body_Picture_2.png, Guest Commentary: Are German Bunds finally heading for the big slide?Guest_Commentary_German_Bunds_Finally_Slide_body_Picture_3.png, Guest Commentary: Are German Bunds finally heading for the big slide?

The Swiss franc has lost only little 0.18% against the euro and stands at 1.2168, whereas the euro gained 1.19% against the US at 1.3144.

By: George Dorgan, Financial Analyst & Portfolio Manager, snbchf.com

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES