Things started the week off where they finished on friday, with some real swings in the Euribor contracts.(European interest rate future) We pushed up to new highs in Jun10-Sep10, Sep10-Dec10 spreads, before pulling back midday. As I have done before I shorted the spreads on the move up, which worked out nicely as they came of a tick from the morning high.
Bonds in general sold of in the morning, especially the UK and EU STIR (short term interest rate) contracts, on heavy volume. Large selling clips were seen across the curve. The market turned however as stocks started to pare its gains and head to negative territory.
We are in the middle of no where for stocks and bonds right now, and with 1st quater earnings starting tomorrow, it will set the tone for where we head next.
The momentum is still on the upside right now, but I believe its starting to fade.
For Euribors I think we mite head up soon after the sell off we have had since the ECB rate meeting. It is still likely the ECB will cut further as the recession isn't going to end any time soon. For Bunds I think we see 124 before we see 120.50.
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