After trading lower in stocks and higher in bonds for much of the day yesterday, a surprisingly strong consumer confidence number turned the tide totally and pushed us up big across the board, with the Dow up 200 points testing the 8500 level again. S&P 500 flirting with 900 and could it be third time lucky for the markets. The consumer confidence number has put a new push to the upside, and stock look strong again the morning, and it wouldn't be surprising if we reach DOW 9000 in June.
As much as I bang on about thinking this market is going down, which I still believe is where the market should be, sentiment is the only thing that matters right now, and there is still plenty of cash on the sidelines to push this market higher.
Bunds have broken out of the decending channel range and is now making a run for 119, as I stated yesterday, the short term target is 118 in Bunds, as we have broken the channel, unless stocks fail to break the resistance levels and make another attempt downwards.
Euribor spreads coninue to move upwards especially at the front of the curve, but the far end seems to be stabilising. Although there was some volume, spreads were very tight and it proved to be a difficult day. Today morning has presented alot more opportunities to enter spreads on euribors, on short sterling there continues to be a lack of real trading opportunities as liquidity is low.
US home sales at 3pm London time will be a market mover today, which could add more fuel for a push to the upside.
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