New ECB chief, bold action. Mario Draghi cut rates by 0.25, which was a surprise to the market but shows how he seems to do more then follow the single mandate set by the ECB to inflation under control.
The Euro dropped 50 ticks before instantly fading the whole move, with the second wave being more of a sustained move to the downside.
As you would expect the shorter term bonds had the best reactions with the Schatz spike 14 ticks with a small fade, and the Euribor have 10 to 12 fat tick move. It was very hard to get in on as there was hardly any offers in the market before the announcement.
Spreads rose initially before coming back off, giving good opportunities to sell as we had a nice pop up. This was because Draghi gave no hint that the ECB's bond-buy programme, a controversial tool that has led to the resignation of two German policymakers, would be accelerated despite the chaos in Greece threatening to engulf the much larger economies of Italy and Spain.
The mess isn't over and tricky conditions will no doubt continue.
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