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I am new to FGBL trading and wanted to gain understanding into what correlations and fundamentals impact the FGBL the most? For example, ES can be correlated with good degree to what VIX, Gold, Yen, 10 year Bond etc is doing. ES is also impacted majorly by Non farm payrolls, rate decisions, FED speak etc.
In a similar way what impact the Bund is a big way? Thanks!
Can you help answer these questions from other members on NexusFi?
Although I not trade the BUND or currently use the BUND in any correlation ( i might tomorrow), some instruments for you to check:
FDAX
Gold
EUR.USD
v1x (the new German volatility index)
BTP - Italian Government 10 yr bond (I think Italy is the third largest bond market in the world at least back in 2011). its more speculative then the Bund.
US Dollar
As for fundamentals: check out the European Central Bank Monetary Policy Press conferences, when Draghi speaks things move, also German government economic releases can move the market.
Generally speaking I think the correlations that you see in the most popular US bond products are similar to the most popular Eurex bond products.
Bund, Bobl and Schatz (all found on Eurex exchange) tend all to be directly correlated, so usually when one goes in one direction, the others do too (volatility of each may be different).
European stock indices such as EuroStoxx 50 and DAX tend to have an inverse correlation to the bonds, so when indices go up bonds go down and viceversa.
This is a general rule, in the similar way that when the ES goes up the US Treasuries tend to go down, but again it's not an exact science.
), some instruments for you to check:
