A strong ISM manufacturing and ISM Non-Manufacturing coupled with a slightly stronger ADP reading bodes well for a potential upside surprise in this Fridays non farm payroll number. Although there has been discrepancies in the past between ADP and NON farm, I got a feeling we are going to get a good number this Friday, which coincides with the run in to the presidential elections...hmm conspiracy theorist say what you will!
Thus we have maintained these near high levels in the equity markets as Europe isn't creating many new headlines, so in that aspect there is no real reason to go down, and when ever we do we simply seem to be brushing it off.
Although I do feel we will come off cause the market doesn't represent the current state of the economy, near term I think we will continue higher.
STIRS have been fairly static lately, with low volatility meaning having to hold on to spreads for much long then usual. As the Bund keeps on rising, spreads have been gradually coming off, and as they're coming near the bottom of the range, (on many 3 months spreads) I've been inclined to buy them. Sep13Dec13s at 4.5 is a level which has held strong before so have been trying to load up on this as it comes.
Tomorrow we have ECB press conference, but this is likely to be a non event as the main actions were taken last month, but any surprise announcement will be welcome.
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