Italian politicians are attempting to calm the markets. Today this seems to be working, and driving risk-on. Eyes on the key levels.
After another negative close, stops can be trailed to 93.00 looking for 90.00 as a first target. Keep an eye on the Italian political agenda and on risk aversion which seems to be creeping in.
Yesterday we expected the Italian 10yr to break back through recent supports, after Conte's initial proposals on immigration, taxes, welfare seem to imply a decisive clash with Brussels. These measures would be good for the population, but EU will not allow them. Further downside is expected and 90.00 is the first target.
The Italian Government has started it's fight against Brussels. BTPs are responding and we may see further downside today.
Conte's League/MS5 Government would win a vote of confidence today. A clash with Brussels is only a matter of time. Markets a little nervous. A breach of key supports would open up the downside again.
According to reports in Italian media, parties across the political spectrum are trying to reach a deal to avoid snap elections. This has calmed markets for the time being, but price action is telling us this is just temporary.
Big moves and volatility expansion in Italian BTPs on the recent political turmoil. Bias remains down in the short term AND in the longer term.
If I had to guess (I currently don't trade ITA bonds) over the coming year or so we are likely to see 10yr yields in Italy rise to around 3.8% based on EW pattern and inverted H+S.
Approaching ABCD PO at 2.750 area $IT10Y, $DE10Y
PO at 3.7 -3/85 area $IT10Y, $EURUSD
Italian 10yr yields have just surpassed the 2.61% level. Bond are clearly in a free fall after the earlier breakout below ~100 earlier in May. The first target at 95.21 has just been surpassed, opening the road towards the secondary target at 90.18. Minor counter trend rally’s are allowed up to 98.65 without altering the highly bearish outlook. IGBs look...
Compared to other major European markets, the Italian Government Bonds (IGB) have been quite bearish over the past two/three years. The recovery in early 2017 has not really altered the general trend. Moreover, now that the recovery and ensuing consolidation has petered out, sellers should make a new push lower once support at 99.77 is taken out. Bearish pressure...
And Gold increase...
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The spread between German Bunds and France or Italian Goverment Bonds are rising again. On Monday, April 11th 2017 Goldman Sachs recommends a market bet as elections loom in France. "We would expect French bond spreads (and yields) to come under upward pressure if the first round of the Presidential election were to result in a strong showing of...
BTP ( ITALIAN GOVERNMENT BONDS) 10 YEAR MATURITY ON THE FACE OF A FALL FROM WHAT THE CHART SUGGESTS. THIS IS THE YIELD SO THE CASH WILL REFLECT THE OPPOSITE AND I HAVE SET A PENDING SELL AT A LEVEL ALREADY TESTED A FEW TIMES AND THE TICKER THERE IS IT10. PLEASE COMMENT WHAT YOU THINK. ITALY IS IN BIG TROUBLE AND I AM ASTONISHED THAT THE YIELDS ON ITALIAN PAPER ARE...