Dax "relationship" to Bund

Discussion in 'Index Futures' started by Billyfoereal, Apr 9, 2011.

  1. Hi

    When you look at the german fixed income, The German Bund, what impact does it have on the Dax Future?

    I thought that when the stock market goes down and futures with it, then the Bund goes up, because when the market is uncertain people tend to move to high liquidity asset with low volatitlity.

    Is this a general valid interpretation of the relationship between the Bund and the Dax? People alsways say to watch the Bund, EUR/USD and Oil prices when trading the Dax, what are the primary reason for that? Because I have noticed that sometimes when the currency market makes a move which is not good for the Dax, it sometimes ignore the currency move, and keep on going up.

    Any reflection here, People?
  2. esmjb


    if you trade the dax, its not worth watching the bund as an indicator in general. there may be times when the two seem to be inversely correlated but that would be an exception and not the rule. If you are trading during US market hours, the spoos are by far the most important indicator to watch. the euro and oil can also be important but like you said, they only matter when they matter. one day the dax can be following oil like clockwork and then completely ignore it the next which can be frustrating.
  3. Yes the Spoos is important how about the nasdaq (tech firms like dax) or DOW (30 biggest companies, also like dax) ?

    I understand your fustration when they dax makes a complete disregard to a vital element which affects the dax, but maybe that is the curveball of the market. Could you say that when they Eur/Usd goes up the dax should go down, because the german exports will become expensive for other countries who import the merchandise?

    If we look at the rising oil price, the stock exchanges around the world, do not seem to be as much affected as you migh think they should? ok, some days the exchanges will have a down day, but most of the times, it still goes up, which I find strange because the cost of the companies (dax 30:s) will go up, and this will show on their earnings.