Thursday, February 26, 2015

European Rate Chart...


If they keep lowering rates and cutting spending soon (to them) the Troika, errrr... I mean, "the Institutions", will be bankrupted:








Continued EUR bearish.

2 comments:

Neil Wilson said...

This has got to be in anticipation of QE.

If the redemption yield is negative, then a QE purchase is a profit for you and a guaranteed loss for the ECB and the NCBs.

Once way bet since you know there is a 'forced buyer' about to enter the market.

Matt Franko said...

The way they did it over here Neil they bought the most recent issues so they bought at "face value"/par or very near....

Initially bonds sold off and rates went up... imo due to spec sellers fears of "printing money!" fomenting inflation while the fed was a huge scale down buyer lowering its bids...

Probably not the exact same thing tho this time with the ECB but I would not be surprised if rates rise a bit when they actually start buying...

The thing for them is the curve has to stay upward sloping and the nim has to be enough for "the institutions" to cover expenses or they will be BK (to them..)

That would be fun to watch!

Rsp