Uncertain open in bunds today as we struggle to measure the impact of this weekends referendum on confidence. I think the outcome of the vote was not a surprise and therefore priced in. Nevertheless this is not a good thing for Goepolitical landscape so i feel risk off is the big play. This weeks FOMC will muddy that play quite some, With improving U.S. data and weather the fed at least will continue with taper. Next stop talk of rate rise!
Bund 30 min. Momentum has been heavy today we broke fridays low straight off but the rally to mid 50s was a bit of a curve ball. So far a failure to break 26 with any force today could signal a quiet mid range afternoon with a smattering of Russian sanctions thrown in to spook weak shorts out.
€ curve
Early strength in the bobl has lead to an exaggerated up move in the bobl/bund spread. As it is in line with the 2s10s & 2s5s curve steepen it would be fool hardy to step infront of it....Unless hedging with a Schatz effectively putting on the Fly. Personally I'd like some bund rallies to fade into steepener positions.
€ teds
After the extreme FTQ bid in bonds and the failure to find any liquidity in the 17s expiry. I've decided to shuffle a bit in on bob teds. Some of the "risk Off" sentiment now dissipated. Ill start playing these from both sides looking for relative value again.
1 comment:
There seems to be a FF spread buyer in the 2Q of '15. They lifted 2K near the close 3/14. I wouldn't be surprised by a timeline statement by the FOMC...
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