Justin Seda E Cauberghe @Fostijn: "𝐀𝐫𝐞 𝐬𝐨𝐯𝐞𝐫𝐞𝐢𝐠𝐧 𝐰𝐞𝐚𝐥𝐭𝐡 𝐟𝐮𝐧𝐝𝐬 𝐬𝐞𝐥𝐥𝐢𝐧𝐠..."

Thailand

𝐀𝐫𝐞 𝐬𝐨𝐯𝐞𝐫𝐞𝐢𝐠𝐧 𝐰𝐞𝐚𝐥𝐭𝐡 𝐟𝐮𝐧𝐝𝐬 𝐬𝐞𝐥𝐥𝐢𝐧𝐠 𝐅𝐫𝐞𝐧𝐜𝐡 𝐠𝐨𝐯𝐞𝐫𝐧𝐦𝐞𝐧𝐭 𝐛𝐨𝐧𝐝𝐬? Dear followers and copiers, This time I would like to share the chart of 𝐭𝐡𝐞 𝐅𝐫𝐞𝐧𝐜𝐡 𝟏𝟎-𝐲𝐞𝐚𝐫 𝐠𝐨𝐯𝐞𝐫𝐧𝐦𝐞𝐧𝐭 𝐛𝐨𝐧𝐝 𝐲𝐢𝐞𝐥𝐝. This is a chart we should keep an eye on. As you can see, the yield has tested this level several times in recent years and is now approaching it again. 𝐈𝐟 𝐢𝐭 𝐛𝐫𝐞𝐚𝐤𝐬 𝐡𝐢𝐠𝐡𝐞𝐫, 𝐢𝐭 𝐜𝐨𝐮𝐥𝐝 𝐡𝐚𝐯𝐞 𝐢𝐦𝐩𝐨𝐫𝐭𝐚𝐧𝐭 𝐢𝐦𝐩𝐥𝐢𝐜𝐚𝐭𝐢𝐨𝐧𝐬 𝐟𝐨𝐫 𝐄𝐮𝐫𝐨𝐩𝐞𝐚𝐧 𝐦𝐚𝐫𝐤𝐞𝐭𝐬. According to TradingEconomics, 𝐅𝐫𝐚𝐧𝐜𝐞 𝐡𝐚𝐬 𝐚 𝐝𝐞𝐛𝐭-𝐭𝐨-𝐆𝐃𝐏 𝐫𝐚𝐭𝐢𝐨 𝐨𝐟 𝐦𝐨𝐫𝐞 𝐭𝐡𝐚𝐧 𝟏𝟎𝟎%, 𝐚𝐧𝐝 𝐦𝐨𝐫𝐞 𝐭𝐡𝐚𝐧 𝟓𝟎% 𝐨𝐟 𝐢𝐭𝐬 𝐠𝐨𝐯𝐞𝐫𝐧𝐦𝐞𝐧𝐭 𝐝𝐞𝐛𝐭 𝐢𝐬 𝐨𝐰𝐧𝐞𝐝 𝐛𝐲 𝐟𝐨𝐫𝐞𝐢𝐠𝐧 𝐢𝐧𝐯𝐞𝐬𝐭𝐨𝐫𝐬. It is possible that some large foreign holders — such as 𝐬𝐨𝐯𝐞𝐫𝐞𝐢𝐠𝐧 𝐰𝐞𝐚𝐥𝐭𝐡 𝐟𝐮𝐧𝐝𝐬 (like Qatar for example?) — are reducing their exposure as they need liquidity. 𝐈𝐟 𝐬𝐞𝐥𝐥𝐢𝐧𝐠 𝐜𝐨𝐧𝐭𝐢𝐧𝐮𝐞𝐬, 𝐭𝐡𝐢𝐬 𝐰𝐢𝐥𝐥 𝐩𝐮𝐬𝐡 𝐅𝐫𝐞𝐧𝐜𝐡 𝐛𝐨𝐫𝐫𝐨𝐰𝐢𝐧𝐠 𝐜𝐨𝐬𝐭𝐬 𝐡𝐢𝐠𝐡𝐞𝐫. This matters because 𝐅𝐫𝐚𝐧𝐜𝐞 𝐬𝐢𝐭𝐬 𝐚𝐭 𝐭𝐡𝐞 𝐜𝐞𝐧𝐭𝐞𝐫 𝐨𝐟 𝐭𝐡𝐞 𝐄𝐮𝐫𝐨𝐳𝐨𝐧𝐞 𝐛𝐨𝐧𝐝 𝐦𝐚𝐫𝐤𝐞𝐭. If French yields rise significantly, it can lead to: • higher interest costs for the French government • pressure on the French budget as debt needs to be refinanced at higher rates • rising bond yields across Europe (social unrest) • potential stress for other highly indebted countries in the Eurozone In short, if this level breaks convincingly, 𝐢𝐭 𝐜𝐨𝐮𝐥𝐝 𝐬𝐢𝐠𝐧𝐚𝐥 𝐭𝐢𝐠𝐡𝐭𝐞𝐧𝐢𝐧𝐠 𝐟𝐢𝐧𝐚𝐧𝐜𝐢𝐚𝐥 𝐜𝐨𝐧𝐝𝐢𝐭𝐢𝐨𝐧𝐬 𝐢𝐧 𝐄𝐮𝐫𝐨𝐩𝐞, which is something investors should watch carefully. $EURUSD $FRA40 $EUSTX50

Not investment advice. The author may have financial interests in the mentioned instruments.