Wednesday, 1 April 2009

Bonds go higher

Bunds have reached top of the range, as bonds go up despite equity strength. The day was very lackluster volume wise, as it appears traders are waiting on the sidelines
as the weeks events unfold. Tomorrow is the start of the G20 meeting, and announcements from which could be a real market driver.
Euribor spreads have seen varied price action, as front month spreads appear to be coming of and far month spreads continuing its rise. Jun10, sep10, Dec10 have seen the bulk of the buying relative to the front months and green months.
It is ironic just as I mentioned the range in the Mar11-Jun11 in the previous post spread it jumped through the 21 resistance level and traded through 22s, where as the Jun10-sep10 spread has come of from 23s to 21s. The curve plays are expected as we approach the ECB meeting, as we anticipate the next move.
Stocks finished there best month for 6 years, but i'm not reading too much in that as its been the best or worst months for a lot of things, as we continue this wild volatility, and see these massive swings in share prices across the board.
It is likely just as it happend when we hit the november low, that we will establish a 1000 point trading range for the next few months, unless there is another big catalyst to push it in either direction.
As far as my approach is concerned, im keeping it small till we see what action the ECB does on thursday.

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