Stock swung from negative to positive after the news that the fed is going to inject 1 trillion into buying long dated bonds. Treasuries flew up on the news as did the bund. The bund almost reached 122 flat, getting as low as 122.11, then consolidating at around the 40 level until the news came out from which it shot up almost 200 ticks, sending spreads lower.
Earlier in the day the euribor spreads did push up from yesterdays drop, and held steady through out the day. The front month spreads remained more bid then the back month spreads which had a lot more weight on them.
Short sterling spreads all went higher moving two ticks higher from the opening.
Tomorrow will be interesting for calendars as we shall see how they will react of this fed move. I will be looking to short more then long, but see what opportunities present it self.
For the bund 124.50 could be a sticky area for the bund, as we may be forming a head and shoulders formation, long term I could still see us retesting 122s.
Its likely to be a volatile day tomorrow for sure, should be ripe with opportunities.
On a side note, I think these bonuses to the AIG execs is a complete outrage. If these execs got millions in bonuses for losing the firm billions, the question has to be asked why didn't Jerome Kerviel get a bonus for losing socgen billions! Surely he deserved a few million! What an unfair world we live in?
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Raj, I totally agree with you! if AIG execs get a bonus so should that Jerome!
ReplyDeleteHello Raj thanks for your daily analysis, im a dedicated follower. Did you see the schatz last night?? It was flying. I know the execs dont deserve their bonuses, but most are locked in a contract written the previous year. Do you think it would cost the banks less to pay them off rather than be smashed by the queue of lawyers waiting to defend the execs?
ReplyDeleteYou have a point there Lince, its the way the system works to be honest, but its just the morality of it. I think the US Govt should tax there bonus 80% and all we be well.
ReplyDelete