It was a pretty split consensus as to what teh ECB was going to do today and they decided to cut 0.25%. This isnt going to have much of an impact but its more symbolic in my opinion.
Draghi remained very accomadative which led to wild fluctuations in the EURO and the BUND.
Initially we came off in the Euro and then pushed higher by over 100 pips as we rose above 1.32.
However we then came off heavily going below 1.30 as Draghi said the ECB are open to the idea of negative rates.
This pushed the Bunds also above 147! And killed any hopes of Euribor Spreads pushing further upwards.
Trading the Euribor spreads has been difficult of late, purely due to lack of participation so today's move were some what of a relief. We did pop up in spreads initially but we are now on new lows as the Bunds consolidate above 147 and the curve is likely to flatten further.
It will be tough to know how to play this as in general even if you manage to get a good price the general lack of action makes it hard to get out, but my philosophy is to always buy these new lows, so I will remain a buyer as it keeps drifting lower, waiting for the pop up if one does arrive.
Tomorrow we have Non farm payrolls, which are likely to be poor which will put further pressure on these Spreads, but hopefully some volatility will arise from the number allowing for some quick scalping in and out.
Draghi remained very accomadative which led to wild fluctuations in the EURO and the BUND.
Initially we came off in the Euro and then pushed higher by over 100 pips as we rose above 1.32.
However we then came off heavily going below 1.30 as Draghi said the ECB are open to the idea of negative rates.
This pushed the Bunds also above 147! And killed any hopes of Euribor Spreads pushing further upwards.
Trading the Euribor spreads has been difficult of late, purely due to lack of participation so today's move were some what of a relief. We did pop up in spreads initially but we are now on new lows as the Bunds consolidate above 147 and the curve is likely to flatten further.
It will be tough to know how to play this as in general even if you manage to get a good price the general lack of action makes it hard to get out, but my philosophy is to always buy these new lows, so I will remain a buyer as it keeps drifting lower, waiting for the pop up if one does arrive.
Tomorrow we have Non farm payrolls, which are likely to be poor which will put further pressure on these Spreads, but hopefully some volatility will arise from the number allowing for some quick scalping in and out.
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