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darkhorse
Registered: Feb 2002
Posts: 3473 |
05-28-12 04:58 PM
Are Greek machinations all that important now, or is the market already moving on to Spain?
Even if Greece stays in, not sure what that really solves.
It's just more "can kicking," and not even all that far down the road -- like less than half a block.
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Specterx
Registered: Dec 2007
Posts: 1126 |
05-29-12 05:43 AM
Quote from darkhorse:
Are Greek machinations all that important now, or is the market already moving on to Spain?
Even if Greece stays in, not sure what that really solves.
It's just more "can kicking," and not even all that far down the road -- like less than half a block.
Yeah I would personally expect a New Democracy win to be a sell-the-news event. Many more elements seem to be in play now: global recession/forlorn decoupling hopes, cessation of margin expansion in U.S. equities and maxing out the presently established limits of policy support. Sort of a perfect storm of short, medium and long-term factors.
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ralph00
Registered: May 2004
Posts: 2275 |
05-29-12 11:51 AM
Greece may not even make it to the June 17 elections.
Spain is in full-scale economic implosion and financial panic. Stubborness and politics are the only things preventing a massive ECB response at this time.
My guess is the ECB (and, let's face it, the Fed) don't want to help out with Spain because it will also throw a lifeline to Greece. If Greece somehow makes it to June 17 and then votes in a way displeasing to Brussels, the markets will be in full panic mode on Sunday evening and the central banks will step in then.
Trouble is, I don't know if the world will make it to June 17.
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dhpar
Registered: Nov 2006
Posts: 1732 |
05-29-12 09:06 PM
with the German short rates where there are what do you think about outright shorting some Schatz futures? (or maybe on a relative basis to 2yr tsy?)
risk-wise I can imagine that nominal rates go slightly negative from here as the fear of euro uncontrolled decommissioning may make people pay for a privilege of owning portion of a hard working German taxpayer. but the risks of that are certainly less than high imo.
on top of that all that crap about Eurobonds should ultimately put a pressure on German yield in any case.
would like to hear some opinion on this - especially from the Rates guys...
p.s. of course i am short already 
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Daal
Registered: Oct 2002
Posts: 8997 |
05-29-12 09:23 PM
In my view the panic have only began. Tons of solutions to EU problems require high levels of panic to get politicians to move, so I don't want to be short a safe haven. Also I wouldn't expect 2y ggb to decline much on eurobonds, the ECB will be at 1% or lower for a long-time. 30y could be affected but there is the panic factor going in the other direction
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dhpar
Registered: Nov 2006
Posts: 1732 |
05-29-12 09:28 PM
Quote from Daal:
In my view the panic have only began. Tons of solutions to EU problems require high levels of panic to get politicians to move, so I don't want to be short a safe haven. Also I wouldn't expect 2y ggb to decline much on eurobonds, the ECB will be at 1% or lower for a long-time. 30y could be affected but there is the panic factor going in the other direction
ok ok. so what do you see here as an downside risk (in bps) for Schatz yield given the current levels?
also, technically the price looks weak...though of course on any medium/long term indicator it is as a bullish chart...
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