As the T-Note hit a Yield of 2.5% just before the European close, we had some serious volatility with Euribors Dropping 6 fat ticks in minutes, stocks getting heavily sold off, and some proper volatility all over.
The Euribor Spreads held within a nice range today, so as long as you didn't get caught in the execution, was an okay day to get some spreads on.
Bunds are trading 141.30, Dax has broken below 7800, the question is with this rapid correction, will traders step in to support the market, like they did so earlier this year?
With volatility like we are seeing today, I tend to play small cause the risk of getting caught on sudden spikes are much higher. I continue to hold a long bias as this is the trend at the moment, but it is very possible the market has over interpreted Bernanke's comments and are over cooking it slightly. Either way the signals are there that this exceptional period of monetary stimulus cant continue forever and we will get to more normal conditions sooner rather then later.
The Euribor Spreads held within a nice range today, so as long as you didn't get caught in the execution, was an okay day to get some spreads on.
Bunds are trading 141.30, Dax has broken below 7800, the question is with this rapid correction, will traders step in to support the market, like they did so earlier this year?
With volatility like we are seeing today, I tend to play small cause the risk of getting caught on sudden spikes are much higher. I continue to hold a long bias as this is the trend at the moment, but it is very possible the market has over interpreted Bernanke's comments and are over cooking it slightly. Either way the signals are there that this exceptional period of monetary stimulus cant continue forever and we will get to more normal conditions sooner rather then later.
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