Yesterday evening we had the fed minutes out, and there wasn't evidence of further stimulus, which in turn led to a sell off in bonds. Bunds fell from 138.40s to as low as 137.60, on the news and as you would expect the yield curve steepened.
The dollar gained alot of strength as you would expect to, as we saw big sell of in dollar pairs, notably the Euro dropping 160 pips +.
Having been long the Euribor spread from earlier, this provided the perfect opportunity to get out, looking back wish I bought more earlier.
However Bunds have fully retraced the move and the spreads have all come back again. I have tentatively gone long a small amount in Mar13Jun13 at 6.5 and Dec13Sep13 at 8.5, but with the ECB rate meeting later on today won be doing much more other then that. Hopefully there is an opportunity to get out before then. It seems now that the front end of the curve is much more bid then the back end, so hopefully that fact will help the front end spread move up.
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