Morning Comment: Keep One Eye on German Bund Yields


There are several reasons why long-term Treasury yields remain low. One obvious reason is the slowdown in growth we've experienced this year...both here in the U.S. and around the globe. However another reason is the ultra low level of interest rates (negative rates in many areas) in other parts of the world...like Germany.

However, those overseas rates have definitely bounced off of their 2019 lows...and this is something that has been going on for several months now...so it cannot be seen as merely a short-term technical rise in rates.

Don't get us wrong, we'd have to see a much larger move in rates in places like Germany before we could say that the long-term trend in rates had been reversed. However, it won't take a much further rise to declare that an intermediate-term change in trend has indeed taken place.

The level we're watching closely is -0.2% on the 10yr German bund. If it breaks above that level in any significant way, it will be a very important development. Not only should it impact U.S. interest rates, but it could/should have an impact on the broad U.S. stock market...and it should definitely have an impact on the interest-rate sensitive groups in the U.S. market.

For more specific details on this issue...including the charts on the German 10yr bund...and to get notes like this on a daily basis, please click here to subscribe to my investment newsletter, "The Maley Report" (TheMaleyReport.com).



Matthew J. Maley

Managing Director

Chief Market Strategist

Miller Tabak + Co., LLC

Founder, The Maley Report

TheMaleyReport.com

275 Grove St. Suite 2-400

Newton, MA 02466

617-663-5381

mmaley@millertabak.com


Although the information contained in this report (not including disclosures contained herein) has been obtained from sources we believe to be reliable, the accuracy and completeness of such information and the opinions expressed herein cannot be guaranteed. This report is for informational purposes only and under no circumstances is it to be construed as an offer to sell, or a solicitation to buy, any security. Any recommendation contained in this report may not be appropriate for all investors. Trading options is not suitable for all investors and may involve risk of loss. Additional information is available upon request or by contacting us at Miller Tabak + Co., LLC, 200 Park Ave. Suite 1700, New York, NY 10166.

Posted to The Maley Report on Dec 02, 2019 — 9:12 AM
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