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Alex
@AlexBloch
1Anno·

Question for bond speculators:


Are $SEGA (-0,05%) interest rate cuts by the ECB in the coming year already largely priced in?

Or is it still worth speculating on further price rises after the ECB cuts interest rates in 2024/2025?

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5 Commenti
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Epi@Epi
1Anno
The most informed market on the stock exchange is the bond market. In this sense, everything is priced in there.

Nobody knows at the moment whether interest rates will rise again in 2025.

My opinion: the ECB cannot continue to raise interest rates because of the difficult budgetary situation in the southern states, the recession in the center and the war in the east. So either they fall or they stay there. Inflation will then simply be brought down with falsified statistics.
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Alex@AlexBloch
1Anno
@Epi Well, there is no company-dependent "information" on the bond market as there is on the stock market. The only information relevant for the price would be if the market knew exactly whether, that and when the ECB would cut interest rates. Curiously, the stock market does not currently believe the ECB that interest rates could remain high for quite some time as the ECB has announced ("longer for high").
However, the current rise in bond prices could quickly fall again as soon as the ECB pauses for a few interest rate changes. In that case, the bond market would have speculated prematurely...
I'm not sure either, which is why I asked the community here for an opinion.
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Alex@AlexBloch
1Anno
It is now the beginning of 2024, and the bond market is quite speculative and anything but certain... Because as soon as the central banks indicate that interest rates will remain high for longer until "normal" (healthy) inflation of 2% is reached, the price of long-dated bonds like this one falls again. And the central banks are unfortunately not letting us look at their cards to ensure that their funds are effective or do not become the object of wild speculation.

...I am now considering whether a trailing-stop-buy order makes sense in order to only enter at a real (possibly still to come) all-time low, even if this could drag on for a long time and cause opportunity costs for me... Does anyone from the community have an opinion on this?
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Alex@AlexBloch
11Mes
Well look at that, it looks as if the market has speculated too hastily on quick and many interest rate cuts... The ECB is now hinting at fewer and later cuts, and the price of such long-term bonds (> 5 years maturity) is already falling again... The best time to get in has therefore not yet been reached...
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Alex@AlexBloch
10Mes
...And now (1 month later) the same game again:
The central banks leave interest rates up for longer than expected and contrary to expectations -> and the (long-term) bond prices fall again.

The bond market is therefore by no means as well informed and does not price everything in as well and as quickly as the equity market, but works completely differently...
because it depends directly on financial policy decisions and not on the success of individual companies.

This current unusual rally in the bond market seems to be "settling" around a stable mean value, with strong fluctuations until the central banks actually start to cut interest rates.
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