11 Jun 2015
Bund rout likely to halt – FXStreet
FXStreet (Barcelona) - FXStreet Editor and Analyst, Omkar Godbole, views that the ‘buy the rumour – sell the fact’ trade seen in German bunds might be near an end.
Key Quotes
“The German 10‐year Bund yield rose above 1% on Wednesday, its highest since September 2014. The markets had begun speculating about the ECB’s QE program back in September 2014, due to which German Bunds and the bonds across the Eurozone plummeted to record lows.”
“The ECB finally began purchasing bonds worth EUR 60 billion per month from March. 9, post which a bond market rout pushed the 10‐year German yield from the record low of 0.049% to a high of 1.05%. Consequently, ‘buy the rumor-sell the fact’ trade could have completed and we are likely to see the 10‐year yield stabilizes in the range of 0.8%‐1.00%. Hence, the markets could once again focus on the rate outlook and ditch the EUR.”
Key Quotes
“The German 10‐year Bund yield rose above 1% on Wednesday, its highest since September 2014. The markets had begun speculating about the ECB’s QE program back in September 2014, due to which German Bunds and the bonds across the Eurozone plummeted to record lows.”
“The ECB finally began purchasing bonds worth EUR 60 billion per month from March. 9, post which a bond market rout pushed the 10‐year German yield from the record low of 0.049% to a high of 1.05%. Consequently, ‘buy the rumor-sell the fact’ trade could have completed and we are likely to see the 10‐year yield stabilizes in the range of 0.8%‐1.00%. Hence, the markets could once again focus on the rate outlook and ditch the EUR.”