Europe vs. Itally
The current Italian situation does not concern us (much). Italians own 65% of the Italian debt market. Perhaps Italian yields are higher than in the rest of Europe but perhaps also they are the only ones fairly priced within the common economic zone (yielding about the same as US Treasuries). Unlike what is happening in the rest of Europe where investors are left seeking higher returns in more risky assets, the money that gets paid to service the Italian debt also serves the interest of Italian savers and pensioners. In the case of Italy, at least the higher interest rate charge gets recycled into the domestic economy, transforming itself into a higher purchasing power for its citizens. Hopefully, we get some sort of an agreement and sanctions can be avoided (it would be cynical to see a former French Finance Minister who himself was among the first to violate European budget rules and getting away with it, to impose the first ever sanctions against a member state). Anything else could spell Doom and Gloom for the European construction. It would gratify hedge funds who are short BTP’s and it vindicate a US administration that does all it can to play divide and conquer with Europe. The last example was given yesterday with the US administration granting Italy but not Europe an exemption to keep importing oil from Iran after the sanctions took effect. Picking an EU member and granting him an exception while mocking a pan European initiative aimed at seeking continued business relations (outside of oil) with Iran is a form of denial. The US administration is craving for an unraveling of the European union not least because its currency is currently (CNY, RUB and INR are coming next but not just yet) the only current serious challenger to the dollar as an anchor to the financial system. Europe should gather and unite, have a clear vision of who its (friendly economic) foe is, stand up to him and refrain from drowning into intestine fights. There is no room for an ego battle between Paris and Rome now.
————- This is a delayed and abbreviated version of our premium subscription-based report sent by email to our subscribers every day prior to Asian Markets Closing by 5AM CET time. For a timely and detailed update on global markets, a comprehensive suite of market reports and a briefing of our tactical model portfolios positioning, consider our premium research. Discounts may apply for all private (USD500/year) and professional (USD2’000/year) subscription plans. We help you know when to run and when to sit by tracking all established or developing trends on all major asset classes and by flagging all statistically meaningful market breakouts or trend breaches. To join our 2 weeks free trial, simply click the link below. You won’t regret it! https://www.bentinpartners.ch/subscribe ————- Important Disclaimer: © Copyright by BentinPartner llc. This blog is not intended as a recommendation, an offer or solicitation for the purchase or sale of any security or underlying asset referenced herein or investment advice. Investors should seek financial advice regarding the suitability of any investment strategy based on their objectives, financial situation, investment horizon and particular needs. This blog does not include information tailored to any particular investor. It has been prepared without any regard to the specific investment objectives, financial situation or particular needs of any person who receives this report. Accordingly, the opinions discussed in this blog may not be suitable for all investors. You should not consider any of the content in this report as legal, tax or financial advice. The data and analysis contained herein are provided "as is" and without warranty of any kind. BentinPartner llc, its employees, or any third party shall not have any liability for any loss sustained by anyone who has relied on the information contained in any publication published by BentinPartner llc. The content and views expressed in this report represents the opinions of Marc Bentin and should not be construed as guarantee of performance with respect to any referenced sector. We remind you that past performance is not necessarily indicative of future results. Although BentinPartner llc believes the information and content included in this report have been obtained from sources considered reliable, no representation or warranty, express or implied, is provided in relation to the accuracy, completeness or reliability of such information. This blog is also not intended to be a complete statement or summary of the industries, markets or developments referred to in the blog. #DollarIndex @federalreserve #ForexMarket #ForexNews #USD #USTreasuries #TradeWars #Markets