Italy 10 Year Government Bond yield – Monthly candlestick chart – May 21th, 2018.

InchCapital Platform – Italy 10 Year Government Bond – Monthly Candlestick Chart – Elliott Wave Forecast – Data Source Fida

 

The bullish trend in Italian 10Y rates is clearly impulsive and destined to continue in the next trading days, based on a market that is recording the fourth consecutive bullish week with yields that exceeded 2,400% yesterday.

This movement is characterized by a significant upward angle, which has broken out the bearish long – term trend – line starting from the last high of the 2011 crisis, registered by Italy on 9 November of that year at 7.4830%.

It is therefore clear that we are facing an already qualified buy signal, which will hardly be exhausted shortly and which has already turned the spotlight on international finance on Italy’s risk.

The targets that can be reached shortly are in the 2.598 / 2.720 area that is, in the area bounded by the previous relative highs recorded in March 2017 and July 2015 respectively. Beyond this area there are already potential targets at 3.070 and 4.190.

 

Italy 10 Year Government Bond yield – Daily closing 2.3990 – May 21th, 2018.

The picture shows the daily long trend of Italy Gov Bond 10Y depicted by a candlestick chart and Elliott Wave Forecast

InchCapital Platform – Italy 10 Year Government Bond – Daily Candlestick Chart – Elliott Wave Forecast – Data Source Fida

 

More specifically, the Inch platform highlights the following Long position for both the short term and the medium – long-term periods read more Italy Government Bond 10Y

 

The picture shows the bullish short trend of Italy Gov. 10Y depicted by a daily bar chart

InchCapital Platform – ITA GOV 10Y – Daily bar chart – Data Source Fida

 

The picture show the medium-long term bullish reversal signal of the Italy Gov. 10Y depicted by weekly candlestick chart

InchCapital Platform – ITA GOV 10Y – Weekly bar chart – Data Source Fida

 

Both Long positions are confirmed by the short and medium / long-term trend stage that show bullish cyclical positions.

 

The picture shows two cyclical positions for daily and weekly time series tha show two bullish phase still ongoing

InchCapital Platform – ITA GOV 10Y – Trend Stage daily and weekly

 

The 2.598 / 2.720 area is very important, as it is very likely that, once again, the markets will need to face up to ECB’s interventions aimed at calming the situation and indirectly controlling the movements of the Euro, especially against the dollar.

Now there is a strong need for cohesion in the EU and turning out in force to oppose to the recent trump positions taken by the Trump administration towards Europe. It is therefore difficult to think that internal problems are exacerbated by rigid positions with regard to Italy.

These considerations are obviously entirely personal and are compared with a bullish impulse never recorded before the high of November 9, 2011.

In fact, therefore, until the yield will not rest on levels lower than 1.7130 and that is at the bottom of 4 May 2018, point of origin of this bullish swing still ongoing, we cannot count on the return of the country risk that we are recording in this spring of “change”.

 

SPREAD ITA – GER 10Y – Daily closing 187 – Update May 21th, 2018.

 

The picture shows the spread ITA - GER 10Y yields depicted by a line chart starting November 2011 to date.

InchCapital Platform – Spread ITA – GER 10Y – Daily line chart – Data Source Fida

 

Attention, however, with respect to what occurred in the previous tensions that have characterized the Country Italy risk; the latter movement is more worrying, considering the spread trend read more Spread ITA – GER 10Y

In addition, in this case, in fact, we see a bullish swing still ongoing with the contextual break out of the bearish trend trend-line of medium / long term. The impulse, which is still unfolding on the upside, occurred at a point in the medium / long-term dynamics capable of generating a bullish reversal destined to last months if not years.

 

InchCapital Platform – Spread ITA – GER 10Y – Daily line chart starting December 1th, 2015 to date

Conclusions

The current spreads are the same as recorded about a year ago. The true risk signal Country for Italy but at this point also of risk Europe will be registered with the bullish break out of 212.00 for the spread and 2.740% for the 10Y yield. Failing that, the tensions are destined to come back through the expected interventions by the ECB.