German Bonds in Trouble? Central Banks versus natural market forces
Snippet from April 22, 2015 Pivotal Events
- The ancient link between weakening commodities and widening credit spreads continues.
- The worst for crude and the worst for spreads cleared in January.
- The spread has corrected from 212 bps to 175 bps.
- The bounce made it to 188 bps and the test of the "low" was to 176 bps.
- This is within seasonal narrowing that could run into May.
- Spreads would be then vulnerable to widening from mid-year on.
- Widening through 188 bps would resume the widening trend.
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