EURUSD: Momentum is still bullish despite yesterday’s bearish engulfing candle.. Chart/Levels from Analyst, Nicole Elliott – Investors Chronicle.


Bond bonanza or bust?
Low inflation leads to record low yields

Yesterday, for the first time ever, the German government issued a brand new 10-year sovereign Bund with a negative yield. Existing 10-year paper has dipped into negative territory (about minus 15 basis points) in 2016 and again last month, but yesterday’s was priced at minus 24 basis points; 2-year Schatz yield even less. Simultaneously Portugal sold a new 10-year sovereign issue at a record low yield of 64 basis points – paper which, at the height of the Eurozone’s 2012 crisis yielded over 17 per cent. This push to new low yields on some EU paper was caused by the view that not only will the ECB keep its key rate at the current minus 40 basis points and re-introduce QE, but it might cut rates this year.

Automobile sales in China fell again in May, by a record 16.4 per cent, the 11th consecutive monthly decline. In fact in 2018 car sales fell for the year as a whole, the first time this has been the case in 20 years.

Financial Markets and Political Commentary