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European interest rates can be tracked the Italian Treasury Bond Futures ETN (ITLY) and the German Bund Futures ETN (BUNL). Note that interest rates and bond prices move in opposite directions. Interest rates rise when bond prices fall and interest rates fall when bond prices rise. With this inverse correlation, we can determine the direction for interest rates in Italy and Germany.
The first chart shows the Italian Treasury Bond Futures ETN (ITLY) with the Italian Milan Index ($MIB) in the indicator window. ITLY fell sharply from mid August to late November. This infers a sharp rise in interest rates on Italian Treasuries. ITLY surged this week, which mean the interest rate fell.
Click this image for a live chart.
The second chart shows the German Bund Futures ETN (BUNL) with the German DAX Index ($DAX). BUNL rose from April to September and German interest rates fell. The bund flattened from September to November, which means interest rates moved sideways. A break below the October low would signal an upside breakout in German interest rates.
Click this image for a live chart.
