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Bunds extend

German Bund futures made a top extension on Friday, at a daily scale. This comes after a substantial run-up in price /drop in yields that has seen much of the short end of the German yield curve turn negative. Investors must pay to lend their money to Germany which seems perverse now that there is no longer a disciplined Bundesbank overseeing the process. We shall see how the European Central bank  performs when it comes time to act as the policemen and lender of last resort at the same time - the next crisis cannot be too far away.

Bunds, Bonds ext 7 comp

In the meantime, it seems relatively safe to take a short position in some bonds. No doubt they will all move together but the ones with most potential to drop may be Italy and France, so we would pick either one or both, as candidates: