Italy “Under Pressure”, but what about Mr. Draghi?

 

We are still under pressure. Now it was no use attempting to reassure the financial markets with a welcome premier. The bullish dynamics are so evident that the only thing to do is wait until the pulses in progress are completed. We will then examine the next descending phase to classify it as corrective or impulsive. So let us see where we are today compared to the trends concerning 10Y ITA BTP, Spread 10Y ITA-GER and 3-month Euribor.

 

10Y ITA BTP – Update hr. 12.11 – May 29th, 2018. 

The pictures shows 10Y italian benchmark daily candlestick chart analyzed on the basis of Elliott Wave Theory

InchCapital Platform – 10Y ITA BTP – Elliott Wave Forecast – Data Source Datalink

 

The dynamic is clearly bullish. We have two targets not yet reached at 3.6100 (intermediate) and 4.1900 (final) at he moment. The trend stage daily and weekly are still on the rise and indicate that there is still directional space not showing any inertial phase read more InchCapital Platform – 10Y ITA BTP

 

The pictures shows two sinusoidal charts representing 10Y ITA BTP interest rates cyclical trend  respected its daily and weekly time series to highlight the short and medium term positions

InchCapital Platform – 10Y ITA BTP – Trend Stage Daily & Weekly

 

The spread shows a still incomplete count with a central extension still in progress. The trend stage also in this case highlight space for further bullish steps towards the subsequent targets at 346.00 and 376.00 read more InchCapital Platform – Spread 10Y ITA-GER

 

Spread 10Y ITA-GER – Update hr. 12.11 May 29th, 2018.

The picture shows spread 10Y ITA-GER linear daily chart analyzed on the basis of Elliott Wave Theory. The perspective are bullish

InchCapital Platform – Spread 10Y ITA-GER – Elliott Wave Forecast – Data Source Fida

 

The 3-month Euribor interest rates are one of the main points of reference for the trend of mortgage loan costs. It is also true that this rate broke out from a sideway phase lasting more than a year and that therefore, after a decline lasting over ten years, new bottoms will hardly be recorded.

 

3-Month Euribor interest rates – daily closing -0.322 – Update May 28th, 2018 

The picture shows 3MTH Euribor interest rates, represented by a candlestick chart

InchCapital Platform 3MTH Euribor – Weekly candlestick chart – Data Source Fida

 

However, it should be noted that during the most acute period of the previous Italian crisis of November 2011 “emergency government Mario Monti” the 3-month Euribor interest rates were at 1.5910 with 10-year rates at 7.4800. Consequently, since Euribor rates are still negative, how costs rise in the existing mortgages pegged to the Euribor? It will certainly increase that of new mortgages but in the short / medium term, I do not see all this risk on the mortgage front.

Conclusions:

sooner or later someone will ask where Mario Draghi is finished. The opportunity to stabilize the financial markets has had it at the best possible point, that is, with 10-year interest rates less than 2.8000 and the spread at 212. Evidently, there are reasons that escape the usually taken rationality. Spread analyzes indicate a split Europe in two.

 

The picture shows three charts representing three different spread analysis of 10Y ITA interest rates versus 10Y Spain,  10Y French and 10Y Germany

InchCapital Platform – 10Y ITA spread vs Spain – France – Germany

The French/German axis on one side and the Mediterranean countries on the other. We are waiting for a response from a “United Europe”, namely from the B.C.E.