Bond today: Btp bear or bull? Here are the instructions for use

Squeezed between the many unfavorable Italian problems and the possible favorable new interventions of the ECB, the BTP was not affected much by the coronavirus events. The relative Future long term marked two days of strong volatility (28 February and 2 March), however immediately returning to contact with the important level of 147.5, resistance / support around which it is placed since 29 January, while the Future on short deadlines he was graphically more nervous but with inevitable minor corrections in terms of absolute variations. An analysis of the state of health of our government therefore imposes itself, in an attempt to define tactical detectors to follow their future evolutions. To this end, today we want to identify five rules valid as instructions for use to quickly assess the strength or weakness of Italian government.

The ten-year yield

It is established. Photographs the situation very quickly, thanks to the fact that it moves around 1%, a level above which the BTPs confirm increasingly negative trends and below which they credit increasingly positive trends. If the 1% is the center of gravity, other quotas to be monitored are as follows: accentuation of the strengthening of quotations beyond progressive 0.93, 0.88 and 0.78% of yield; greater weakening over increasing 1.08, 1.18 and 1.24% yield.

The biennial performance

Same evaluation method with respect to the more “sensitive” two-year deadlines. Being a currently negative value, it is easy to indicate the evolution of the phases with the fact of remaining within the minus sign or with the transition to the plus sign. The last time this happened only briefly occurred in mid-January. Yesterday’s figure puts it at a negative 0.093%, with percentage changes in the day, however, rather violent.