Current themes : U.S. bigwigs fail to agree budget, markets appear unmoved by this. I guess we await the real crunch on 17th when the debt ceiling issue has to be considered. Never the less I expect the coming months economic data from U.S. will not be positive given this situation. Likely to see all taper talk put on the back burner til next year....Unless it is forced in order to get the debt ceiling approval.
In Europe, Berlusconi Freedom Party pull out from a coalition has set Italy back a few months and triggered minor FTQ bidding of bonds. Thanks to Draghi's "we'll do whatever" speech last summer Periph bonds haven't been hurt anywhere as much as they would've been say 2 years ago. Betting against Euro is not such a winner these days. (fade the bad news)
U.S. ten year has drifted off from Fridays highs and with ECB today I don't expect any trends developing before Q&A.
Nothing happened overnight so I see bunds opening round about lastnights close. If yesterdays low is breached then 139.72 is my next obvious level.
Personally I'd be surprised if he does use this....So will the teds! Plenty of value there if he does.
There is a German ten year auction this AM to watch for before the main event....Annnnd ADP could get extra attention today.
Good luck
Lee
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