1Mon·

European government bonds?

$XGLE (-0.24%) Interest rates are falling in Europe, the stock markets in the USA are running out of steam and European government bonds are losing ground? This ETF by 2 percent in one day? Why?

In principle, I expect a performance of 3 percent per year with little volatility...

4 Comments

Epi@Epi

1Mon

Have you read the news in the last few days?
USA drops Europe, Europe must now invest massively itself. This requires massive new debt. What happens when the supply of a good (government bonds) suddenly increases massively? Right, the price falls.
The ECB only controls the overnight interest rate; long-term interest rates, such as in the ETF, are normally determined by the market. There should be more to come in the coming weeks and months. 🤷

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Wolfgang@goebi22

1Mon

@Epi well, and the USA is going bankrupt, which is why its shares are falling. The dollar falls, so gold is converted into euros... So what to do? EU shares, right?

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Fredi K.@equity_expert_1695

1Mon

@goebi22 if the USA goes bankrupt in your opinion, you don't need to invest in anything anymore 😂

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Epi@Epi

1Mon

@goebi22 Is US bankruptcy your scenario? Then you can bet on falling bond and share prices.

If the USD falls, gold in euros may not be the best idea, because then gold only rises in USD. Currency-hedged gold ETCs would then be the best choice.

Perhaps EU TIPS are also an idea? Or commodities?

There is always a bull market somewhere. At the moment it's EU Value, but commodities are already waiting in the wings. Then EM should follow 😉

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