Forex Fundamental Analysis – The bond crisis?!


EURUSD trading plan:

Traders are already sounding an alert on what may lie ahead. Italian government bond yields jumped past 4% this month for the first time since 2014 as investors took fright at the ECB’s plan to raise interest rates in July for the first time in a decade. Inflation now sits four times above the ECB’s 2% target and Lagarde offered a sense of the recent soul-searching last week, telling European lawmakers that officials “misjudged certain factors that had a major impact on inflation.” While the ECB is now on the brink of reversing subzero rates, the turnaround is being tested by the worst selloff in years in the bonds of indebted euro-area governments. With the bank’s large-scale asset purchases ending Friday, policy makers are trying to design a backstop to help tame yields as their push to normalize monetary policy shifts up a gear.

Investment idea: sell 1.0615 and take profit 1.0525

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