Rebirth of the Financial Overlord

"William. In addition to continuing to build a short position in sterling, we also need to build a short position in German long-term government bond futures. In addition, we also need to establish a certain long position in British short-term interest rate futures and long-term treasury bonds."

"."

Shorting the British pound is understandable. The British economy is in a downturn, and there is a certain depreciation expectation for the British pound.

But short German Bunds and long U.K. Bunds.

What kind of flamboyant operation is this.

William couldn't help frowning.

The so-called interest rate futures, as the name suggests, are standardized contracts based on interest rate fluctuations.

Because since the oil crisis, interest rate fluctuations in various countries have become increasingly serious, and the government has to control the cost of private commercial lending through control, but this control itself is mandatory and is not conducive to business development. Therefore, holders of various financial products, In particular, various financial institutions are in urgent need of a simple, feasible, and effective tool for managing interest rate risk.

It is against this background that interest rate futures came into being.

Government bonds, also known as treasury bonds, are the largest high-end financial derivatives among interest rate futures.

Because government bond futures directly reflect changes in market interest rates, but the deposit and loan interest rates are not generated by market transactions, but are regulated by the central bank, the central bank's monetary policy is the most important influence on the price of government bond futures.

With the merger of the two Germanys, East Germans happily flocked to West Germany, where they enjoy more freedom and material wealth, expecting to be employed there and enjoy social benefits. Increase.

When a country's fiscal deficit accumulates too high, it is like a company with too much debt, which is not a good thing for the country's long-term economic development, and it is also a long-term negative for the country's currency. The only way to solve the fiscal deficit is to reduce government spending or increase taxes.

These two measures have adverse effects on economic or social stability.

If a country's fiscal deficit increases, the country's currency will fall. On the contrary, if the fiscal deficit shrinks, it means that the country's economy is good, and the country's currency will rise.

With Germany's current deficit and the high exchange rate of the mark to the US dollar, as the speed of German integration slows down, the German government will inevitably reduce infrastructure and various investments, and the tax rate will definitely increase.

According to this logic, the probability of the mark going down against the dollar is much higher than that of going up.

As one of the leading countries in the European Union, the German mark has the largest proportion in the ECU. Now that the economies of the United Kingdom, Italy, France, and Belgium are in a downturn, interest rates need to be cut to release currency reserves to stimulate inflation.

As the old saying goes, people can't help themselves in the rivers and lakes.

In many cases, the country is not a bigger rivers and lakes.

Being in the arena of the European Union, even if Germany wants to curb inflation and raise interest rates, it has to consider the reactions of other countries.

Whether it is political demands or the economic conditions of EU member states, it is not suitable to raise interest rates.

There is no possibility of raising interest rates in Germany, short German government bonds, the UK has a high probability of cutting interest rates to stimulate inflation, but long British government bonds.

Boss, have you been kicked in the head by a donkey?

William thought for a long time, but he couldn't see any reason to short German government bonds and long British government bonds.

Treasury bonds are bonds issued by the state, and the benchmark is customized based on annualized returns. Therefore, the trend of treasury bond futures in the market and interest rates are in an inverse relationship.

When the interest rate is raised, the income of bank certificates of deposit will increase, then the income of buying government bonds will decrease, and the price will go down due to the lack of buyer capital, and vice versa.

Based on the current fundamentals of the UK and the signals released by the Bank of England not long ago, lowering interest rates is almost a certainty. Countries need lower interest rates to stimulate inflation. There is Deutsche Bank, which has switched to the European Central Bank, and the demands of member states are also crucial. ,

If Germany raises interest rates again, the Mark will continue to strengthen, and liquidity capital will continue to flow out of other countries to hold Mark assets, which is very unfavorable for countries other than Germany.

There is almost no possibility of raising interest rates in Germany.

"Boss. To be honest, I don't understand why it is doing this. The Bank of England has no possibility of raising interest rates. You may not be in the UK. You don't know that the interest rate of the British home loan is not fixed. Now that the British real estate is in a downturn, they will definitely cut the interest rate. "

"William, you probably still don't understand what the core of capitalism is. Believe me, the European Union is the core of capital, so, it will always be capital supremacy. Also, you probably haven't noticed the actions of the Federal Reserve. I expect that at the meeting next week At the interest rate meeting, Greenspan will definitely tell the market a clear possibility of raising interest rates, or make a decision to raise interest rates.

Think about it, if you were the president of Deutsche Bank, would you look at the devaluation of the mark to stimulate inflation again, or would you choose to raise interest rates to curb inflation.

correct.

I think you also need to understand the difference between the core responsibilities of Deutsche Bank and the Fed. "

"."

The difference between Germany and the Fed?

William was dumbfounded. Isn't it the central bank?

Helplessly raised his eyebrows.

William has a serious sense of crisis. As the company's territory grows bigger and bigger, he finds that he can't keep up with the pace of his boss's battle.

"Boss. I think I need to recharge. Do you have any good advice?"

"Haha William, do you know what I like most about you?"

"Chrysanthemum? Boss, if you like it, I'd like to offer it."

"Go away. My favorite is to ask even if you don't understand. If you want to understand the rules of the world, I suggest you read the Book of Changes and Sun Tzu's Art of War."

"."

hang up the phone.

William waved his hands and rubbed Hatty Morahan's blond hair. This guy deeply remembered Shen Jiannan's teaching that as a trader, he must control the blood in his head.

After a long time, his heart gradually stabilized.

After picking up the mouse and clicking a few times, various contracts in the London International Futures Market appeared in front of my eyes.

20-UK-CIR, 103.15.

SG, 99.8.

GGB, 105.35.

After a casual glance, William waved away Hattie Morahan, who was wiping her lips, and picked up the phone.

After a while, the phone was connected.

"Little San. I'm William. 20-UK-CI to add 30 million more positions. SG September, open 10 million more positions. 10-GGB, sell 30 million pounds."

"."

Ukraine, Chenilvchi Oblast.

An army green helicopter buzzes and rotates over the state, sitting in the cockpit and looking down from a high altitude, the eyes are full of green, which makes people feel a different kind of relaxation.

But for An Ran Kardashian, her heart seemed to be being pulled, and it was difficult to calm down.

At that time, she always thought that she would never see her family again, so she could only hide her name and flee all over the world, but who would have thought that after going around several times, she could finally return to her homeland.

Every inch of the land seems to have a familiar taste, and every forest seems to have the atmosphere of home.

"An Ran. Nervous? This is not like you."