We had good trading volume across the board as both the ECB and BoE held rates steady. Short term interest rate futures have been selling off big time after Trichets speech. The Euribor is down 25 FAT ticks since the rate announcement yesterday. Trichet used the word "appropriate" which suggests he is happy with these levels right now and isn't contemplating any further cuts.
Euribor spreads have been moving around quite a bit with the short end having moved higher, trading 26s on the Jun10-Sep10 spread. Red month spreads have been coming off slightly, with the Mar11-Jun11 trading 26.5s as we speak coming off 2.5 ticks from yesterdays high.
Bunds sold off to trade 119.00 right now, bouncing nicely off the upper band of the downward channel. Looking forward with stocks looking strong, and risk appetite increasing, 118 looks ever more likely.
On the stock front we continue to show strength which suggest that Wednesdays sell off was just a blip. With US job numbers later today, any slight improvement could set the stage for 9000 in the Dow next week.
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