Yesterdays price action experienced more Bohner retractions than my 18/30s holiday to Benidorm in 93! It also displayed classic buy the rumour sell the fact psychology. All be it the the other way round for bonds....You know what I mean.
For days now bonds have pushed through new lows in anticipation of a deal on the budget/debt ceiling. When it finally comes the bonds rally there little booties off.
Over night the tens are 4 to 5 ticks higher than at Eurex close.
Bunds
Quite a pull back in the bunds after the announcement but we are still below the downward trend. So my thinking is this could be a good place to start shorting long end with pretty cheap stops. However; my view based on whats likely to happen over the next 4 weeks says "save your money". Data out of the U.S. in November is likely to be rather negative and any thoughts of a 2013 Taper should be thrown in the bin right away. We will have fun with the data for the rest of the year. Lots of "oh it was bad coz of the shutdown" might see contradictory movements/reactions.
The € curves displayed an equal amount of pull back from the long term trend.
€ teds.
UK Retail sales and some Spanish 5s and 3s auction to watch out for this AM.
Good luck,
Lee
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