Gold Prices Slide Below $5,000 as Strong Dollar and Central Bank Outlook Weigh on Metals 
Dollar Steadies Ahead of ECB and BoE Decisions as Markets Turn Risk-Off 
Thailand Inflation Remains Negative for 10th Straight Month in January 
Trump’s Inflation Claims Clash With Voters’ Cost-of-Living Reality 
Oil Prices Slide on US-Iran Talks, Dollar Strength and Profit-Taking Pressure 
Fed Governor Lisa Cook Warns Inflation Risks Remain as Rates Stay Steady 
RBI Holds Repo Rate at 5.25% as India’s Growth Outlook Strengthens After U.S. Trade Deal 
Best Gold Stocks to Buy Now: AABB, GOLD, GDX 
Silver Prices Plunge in Asian Trade as Dollar Strength Triggers Fresh Precious Metals Sell-Off 
 - EconoTimes)
In an article published on October 26th, we recommended selling 10-year bund after a breakout of 162.5 area with the first target being around 160 area and we forecasted the bund to drop towards 153 area. The story is available here, http://www.econotimes.com/FxWirePro-10-year-bund-heads-for-a-sell-breakout-367667
The first target has been reached. While most of the analysts are calling the drop in bond prices around the world as Trump effect (Donald Trump is the new President of the United States), we smell the threat of looming inflation, which we believe has to do more with the selloffs than the effect of Trump Presidency. However, it is a fact, that a win by Mr. Trump is influencing some commodities like copper but the rises in commodity prices were well under way.
German 10-year bund is trading at 0.27 percent; it was at -0.1 percent in early October. German 2-year bond is trading at -0.61 percent. While we suspect the 2-year yield to remain closely anchored to European Central Bank’s (ECB) negative interest rate, we expect the spread between 2-year and 10-year to widen further.
Hence, keep riding our recommended short call in bund and keep selling at rallies. Areas like, 163 and 164 are likely to act as key resistance.
