Equities dumped along with bonds as the higher inflation putting pressure on bonds, and European uncertainties putting pressure on stocks.
The pullback was overdue and often it tends to happen quite fast. I think as the underlying trend is still bullish it will present some good opportunities if we get a bit more downside.
The schatz is down 17.5 ticks as I write despite equity weakness, and is down 70 ticks since last Thursday. This in tern has lead to flattening spreads as short term expectation for rate movement increase.
Euribor spreads seem to be steady on the far end of the curve, and that is where most of my attention has been of late. Just scalping the range, as it seems to be the safest strategy right now.
Tomorrow we have UK retail sales, a good number here would add to the chances of a early rate hike. Lets see how it pans out.
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