Dear friends of marketing,
I would like to point out a circumstance that has received little attention so far, but which could have a significant impact on the European stock markets in particular.
The long-dated European government bonds (25+y Euro Gov Bonds) are about to break out of their one-year consolidation (triangle) to the downside. If the breakout is confirmed, the technical downside potential is considerable.
Since the bond markets are larger than the equity markets and are primarily handled by institutional investors, this is typically where the informed money is. Price changes here very often have predictive power for the equity markets.
Falling bond prices mean rising interest rates mean rising opportunity costs for stocks mean falling stock prices.
So: keep an eye on these long-dated bonds! If the breakout is confirmed, we are in for some uncomfortable times on the stock market. And not only there...
A profitable week to you!
