Bund futures: set to print all time highs

Yesterday Bund futures rose above 168, which is close to the all time high seen in June 2016 of 168.86 and it is also close to the R3 pivot point on the daily chart. There is a number of factors likely to keep pushing on Bund futures:

  1. Germany: Angela Merkel is making her domestic presence felt as she acts to steady the ship. This means that sensible fiscal foundations will stay for the next couple of years.  Merkel has resolved to stay out her current term providing stability.
  2. Italy: the Italian Deputy Prime Minister Salvini is spoiling for a fight with the EU again. Salvini said that the European Commission could impose a €3bln fine on Italy for breaking EU fiscal rules. Other reports note that the Commission is ready to start disciplinary actions against Italy on June 05. Matteo Salvini said, ‘let’s see if we get this letter where theuy give us a fine for debt accumulated over the past and tell us to pay 3 billion euros’. Salvini’s party was very successful in the European elections and he pledged to, ‘use all his energies’ to fight European fiscal rules. He is in a bullish mood.
  3. EU: Senior European Jobs are up for change, including the name of Mario Draghi’s successor,  and this is set to carry on until the end of June.

All of the above making Bund futures a buy from support.