German CPI signal for long Bunds...?

As you know I firmly believe early 2014 is about moving risk from equity to bonds, w. little support yet, but now the deflation or dis-inflation pattern I have looked for is not only flashing red but also confirming a significant slow-down which to me covers over a micro level slow-down of significance in Germany, Europe, Asia and the US.

 

My main theme for 2014 H1 is one of "pro-active lower" growth in Asia – combined with increased EU tensions into May EU election, as The Economists coined it: The Euro tea party movement.

 

Now today Germany shocked with 1.2% HICP number (+1.4% expected) this leads me to think tomorrow's Eurzone CPI will be 0.8% or even 0.7%.........

 

Combine this is 10 Yr. US trading @ the 3.00% levels which had FOMC delay tapering in September, and long bond closing in on 4% - plus final most of the heavy weight FOMC speak recently has been about lack of productivity as key ingredients for more jobs and lower growth…(See Bernanke and Lacker last week)

 

Net: Going long some Bund 141 Feb 14  calls @ .12000 into both ECB (Thursday) and CPI tomorrow.  By the way one way for ECB to "engineer" lower EUR would to rehash their deflation concern…..

 

Steen

 

 

 

 

 

 

 

 

 

Med venlig hilsen  |  Best regards
Steen Jakobsen  |  Chief Investment Officer

 

Saxo Bank A/S  |  Philip Heymans Allé 15  |  DK-2900 Hellerup
Phone: +45 39 77 40 00  |  Direct: +45 39 77 62 23  |  Mobile: +45 51 54 50 00

 

Research: http://www.tradingfloor.com/traders/steen-jakobsen

Please visit our website at www.saxobank.com

 

This email may contain confidential and/or privileged information.
If you are not the intended recipient (or have received this email
by mistake), please notify the sender immediately and destroy this
email. Any unauthorised copying, disclosure or distribution of the
material in this email is strictly prohibited.

Email transmission security and error-free status cannot be guaranteed
as information could be intercepted, corrupted, destroyed, delayed,
incomplete, or contain viruses. The sender therefore does not accept
liability for any errors or omissions in the contents of this message
which may arise as a result of email transmission.