‘Draghi’, and ‘Why people are opting for bonds’ are the key topics in today’s discussion with Nicole Elliott, Private Investor and Technical Analyst, when she joined Zak Mir, Technical Analyst for Zaks Traders Cafe, and Mike Ingram, Strategist for BGC Partners, on the Tip TV Finance Show.
Key Points:
“2-yr government paper Schatz: Yields are still pointing south, the fact that we are in negative territory is not new, what matters now is the deposit rate”
“…now with lousy business proposals and people with flaky credit ratings, you don’t want to lend to them, so you park more money in the central bank, the deposit rate is absolutely key, if the deposit rate is less than inflation then the commercial bank will lose money”
“….difference with the Schatz is that you are not being taxed as the nominal value is going up….that’s why people are opting to buy the paper rather than be taxed by the central bank”
“Bund has stopped at the 50% retracement, has slowed down and now we are turning south again,……. could hold here for 6 months, nothing in this chart suggesting the downtrend has come to an end”
“Portugal 10 year – was yielding 16%, had a back up last month, stopped at the 50% level, new ceiling at 4.5%, one of several EU countries without a workable government, if yields are 300 times what Germans are currently at 3% versus 0, haven’t got a hope in hell”
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