BOJ Signals More Rate Hikes as Inflation Risks Rise Amid Energy Price Pressures 
China Keeps Loan Prime Rates Unchanged for 13th Straight Month as Policymakers Prioritize Credit Demand Recovery 
Goldman Sachs Sees Fed Holding Interest Rates Steady Until 2027 
Kevin Warsh Faces Early Fed Test as Inflation Risks Challenge Rate-Cut Expectations 
BOJ Rate Hike Expectations Rise as Weak Yen and Strong U.S. Jobs Data Increase Pressure 
RBI Holds Interest Rates at 5.25%, Cuts India Growth Forecast Amid Rising Global Risks 
ECB Set to Raise Interest Rates as Energy Shock Fuels Eurozone Inflation Concerns 
ECB Keeps July Rate Options Open Amid Iran War Energy Price Risks 
Taiwan Central Bank Likely to Keep Interest Rates Unchanged Through 2027 
BoE Policymaker Alan Taylor Signals No Need for Interest Rate Hike Amid Iran War Inflation Risks 
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.
