We were looking at the 37 level, as a resistance ont the sep10-dec10 spread for a while now but we have finally broken through and have traded as high as 39 as we establish a larger range for the spread. We are ranging between 36s and 38s right now which is giving us some good trading opportunities. As traders price in rate increases over the coming year, front month spreads have shot up, where as green month spreads have fallen sharply and the red months have fallen a couple of ticks.
As stocks remain pegged to the upside, Bonds have been pressured to the down side, with bunds trading low 121s.
The rally in stocks has also led to dollar weakness, as all major currencies are reaching multi months highs against the dollar.
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