14/03/2014

U.S. tens has continued to drift higher since the Eurex close, only by a couple of tics but enough to ensure that bunds are likely to test above yesterdays hi early this am.

ty 30min

Dax appears to have been hit by the Ukraine situation harder than other indices which makes sense given the business ties Germany has with Russia.
Dax Daily

 

 

 Ukraine/Russia conflict, Chinese economy struggling and Japan not looking too good. Draghi starting to voice minor concerns regarding Euro strength all seem to amount to buying German bonds and Euribor.
bund 240min

I can imagine we'll get a pull back at some point maybe just ahead of Lavrov's meet with Kerry. If nothing solid is dealt with during these talks make sure you're not selling bunds for the weekend!

We also do have some data to contend with. Ger CPI, EUR employment change this am before  US PPI & Michigan Consumer Sentiment. US data has started to shrug off the spectre of Polar Vortex  so these may give some respite to the up moves in bonds. (probably good opportunities to buy dips!)

 Bund 30min

 

€ curve

As you would expect, lots of aggressive flattening. If my memory serves me correct tho these type events do usually see more aggressive buying in bobl. This clearly hasn't happened as the bobl/bund spread has flattened quite a bit and previous lows are in sight. If i buy any of these spreads today it will only be on the back of a huge bund up spike......And I'll be making sure i'm out very quickly. That said. I wont be adding to any short spreads without a significant pullback. This all despite Draghi's semi Dovish tone last night.

 

 

€ teds,  shortend teds begin to come under pressure as expected during these occurrences. Draghi concerns about FX has added a little support to the Euribor. So the down move has been relatively gentle. In the back reds and greens we are witnessing quite some strength versus Bobl. I guess the lack of liquidity has meant that the bids are chasing very nervous offers. Can't see a market maker offer for miles!

 

Good luck