The ECB plans are due for release on Thursday this week as European equities push to find 7-year highs.
The Germany30 [DAX] has risen from Thursday’s lows of 9528.50 to all-time highs on Friday of 10314. On Monday the index opened at 10236 and is settling at 10209.
Marios Draghi, president of the European Central Bank is expected to reinforce his quantitative easing plan for the failing Eurozone with the possibility of a programme in excess of 500 billion euros across 2 years being pumped into the economy through a variety of bond buying deals.
Investors are taking to the futures market, especially the European indices as they gain strength from the volatility of the euro following last week’s Swiss franc crisis. The EURCHF dropped from 1.20 benchmark to 0.90, down 30 points or 25%, over the first session on Thursday when the Swiss National Bank unpegged the Swiss franc from the euro. Since then it has recovered from Friday’s 11-year low up 1.1% but the forex market has been affected on a global level with some brokers going bankrupt due to losses, and many retail investors losing full account equity due to high leverages and risk exposure.
Losses so far from the major investment banks are listed by Reuters:
Citigroup Inc - $400 million cumulative losses
Deutsche Bank - $150 million
Barclays less than $100 million
Stimulation for the Eurozone from the ECB and the negative inflation have however made sovereign bonds attractive. Even though the GER10YBond is paying out a record low yield of 0.40%, it hit an all-time high on Friday’ markets of 157.94 and is fluctuating on its upward trend as of Monday.
Likewise, the Gilt10Y bond has returned from its December 2013 low of 105.98 and is now on an upward trend seeing 122.13 on Monday.
MT4 chart: Germany30
MT4 chart: GER10YBond
MT4 chart: Gilt10Y
Trade bond CFDs on STOCK.com with full training given to all clients