After the retrace in the Bunds, and retrace in Euribor spreads, it seems for now that we are holding steady around these spread levels. We are trading 7/7.5s Jun13Sep13 as I write and 9/9.5 in Sep13Dec13. These spreads have all fallen as you would expect from the lofty highs two weeks ago as the Bund has retraced its 300 tick move downwards. On top of this Stocks seem to have found value to as we trade in a smallish range.
Looking ahead with 7s holding well yesterday in Jun13Sep13 and 8/8.5 being the last point of support for the sep13dec13, I'm inclined to go long around here. In fact as i write i long small 7s in Jun13sep13 and long 9.5s Sep13dec13. Unless anything changes fundamentally in the next few days I expect these levels to hold up, hopefully for a small retrace back to 7.5s/8s in Jun13Sep13.
With a four day weekend coming up it could be more quieter then usual as we approach the end of the week, but tuesdays open could be very lively as we are still going to have the release of Non Farm payrolls on Friday although most markets are shut. Should be fun!
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