J.P. Morgan Now Expects Two ECB Rate Hikes Amid Inflation Pressures 
Bank of Japan Holds Rates Steady Amid Iran War Inflation Fears 
ANZ and Westpac Forecast Two RBA Rate Hikes in March and May 2026 
Fed Rate Cut Hopes Fade as Oil Prices Stoke Inflation Fears 
Gold Prices Fall Amid Rate Jitters; Copper Steady as China Stimulus Eyed 
Goldman Sachs Raises ECB Rate Hike Forecast Amid Persistent Energy-Driven Inflation 
Taiwan Central Bank Expected to Hold Interest Rates Steady Through 2027 
RBA Raises Cash Rate to 4.10% in Closest Vote Since Transparent Voting Began 
After the European Central Bank (ECB) announced fresh stimulus of €540 billion to be phased over next year, after the current purchase program expires in March 2017, the 10-year bund has reversed its recent decline triggered by inflationary fear after the Republican candidate Donald Trump secured victory in the US election. After bottoming in 2011, during the European debt crisis, the 10-year bund has steadily marched into higher highs and reached 168.3 in September. Since then, it has declined and at a faster pace after the Trump victory to reach 159.1 by the mid-November.
We have already recommended going short in the 10-year bund at the break of 162.5 to the downside with a short term target of 160 and a long-term target of 153. We recommended the stop loss around the 168 level. We also forecasted that the bund is unlikely to correct beyond 163.5, however, that was before the ECB announcement.
After reassessing our call post-ECB, we revise the plausible correction level from 163.5 to 165 but maintain the downside outlook and recommend using the rally to enter fresh short positions.
