27/08/2014

US tens have drifted off of lows overnight so I expect bunds to open around the 151.00 area, which means we wont be far from this weeks 151.09 hi.
Off the Eurex open is Gfk Consumer confidence and EUR import price index. Nothing too market impacting...Confidence is not high and there is growing sentiment that extra EUR stimulus is on the way.
After the bank holiday stop ups in European fixed income yesterday saw a minor consolidation. I expect we will see any downside brief and shallow this week as we prepare for the summer to end and get back to real volumes and activity for September.
Big question for us is - How will Draghi's asset purchase plan work???

EU curve. Only one direction(sorry)

Large stops in Schatz on Monday could have given you an opportunity to sell 2s5s...Its the one curve trade not on all time lows as Bobl appears to lack the upwards vigour of bunds and Schatz. In general tho I see these curves only continue to flatten. Although BTP's and OAT's
 may offer better value than bunds to buy.
 BTP-BUND spread

Teds
In keeping with strong stuimulus view the teds to continue to look strong. Look for stops in the bonds to give value in buying ted dips.....That said Euribor trading is drying up not much 2 way flow. So patience will be important.

Good luck
L