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German Bund Futures Volatility Forecast (01/02/2011)

The last week we suggested our readers to remain bearish on German Bunds and our forecasts turned out to be successful even if the returns were not extremely high.

On the other hand, the fact that the volatility is back to 0.32% (5% annualised) is a great warning signal because the current situation is clearly not going to last long. Specifically, the volatility should get back to 0.37% – 0.39% (5.8% – 6.1% annualised) bringing down the price towards the 121.5 – 122 euro.

Some important news, such as Non-Farm Payrolls figures, is going to be released this week and these market movers could change significantly the situation even if the overall trend remains bearish.

The staff of HyperVolatility advises you to look for short opportunities because an augment in volatility is statistically more probable than a further drop and as a consequence German Bund futures should head south even during this week.

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