Lots happened since my last post. We've begun the taper. Large steepeners over the holiday period have given way to flatteners as non farm disappoints & Fomc minutes never threw up any shocks. ECB reinforced the more accomadative stance, plenty of tools on the table if needed.
I haven't watched the markets a great deal the past fortnight so I'll be treading lightly until I get my eye in on how these markets are taking the data. Having said this, I am a tad surprised at the the amount of follow through in bonds yesterday post Non farm disappointment. I guess there were more unhappy & weak shorts in place than I expected.
TY
I expect the bunds to open a Little off from yesterday close based on the US tens overnight. All eyes will be on the UK data this AM. Currently I have the bunds pretty much in no mans land. Short term momentum has me seeing a 141 handle as an easy early target. I do see 140.60 to 40 as a good area for consolidation and range trading if the upward momentum runs outs of steam.
€ curve
With the up move in long end the past couple of days we have seen quite the curve flattening. I suspect the move has been a tad too sharp and would look for some pull back and consolidation before the next move.
Plenty of data out all week so I'll stick to light and changeable for now.
Be lucky
Lee
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