New ECB chief, bold action. Mario Draghi cut rates by 0.25, which was a surprise to the market but shows how he seems to do more then follow the single mandate set by the ECB to inflation under control.
The Euro dropped 50 ticks before instantly fading the whole move, with the second wave being more of a sustained move to the downside.
As you would expect the shorter term bonds had the best reactions with the Schatz spike 14 ticks with a small fade, and the Euribor have 10 to 12 fat tick move. It was very hard to get in on as there was hardly any offers in the market before the announcement.
Spreads rose initially before coming back off, giving good opportunities to sell as we had a nice pop up. This was because Draghi gave no hint that the ECB's bond-buy programme, a controversial tool that has led to the resignation of two German policymakers, would be accelerated despite the chaos in Greece threatening to engulf the much larger economies of Italy and Spain.
The mess isn't over and tricky conditions will no doubt continue.
Showing posts with label ECB. Show all posts
Showing posts with label ECB. Show all posts
Thursday, 3 November 2011
Wednesday, 14 September 2011
Europe to introduce Eurobonds?
Market action has been very volatile to say the least, as Bunds finally lose some ground on the back of the chance of a Eurobond. Such action lead to a pop up in the Euro as well as equities as they reversed earlier losses.
Here is an extract from Barroso:
European Commission president Jose Manuel Barroso has said he will put forward moves to tackle the eurozone debt crisis, which he called "the most serious challenge of a generation".
He said he would urge the 17 eurozone nations to issue joint bonds, allowing them to borrow money collectively.
Eurobonds have been backed by Italian Finance Minister Giulio Tremonti and investor George Soros.
However, Germany has repeatedly expressed its opposition to the idea.
His comments came ahead of an emergency conference call between German Chancellor Angela Merkel, French President Nicolas Sarkozy and Greek Prime Minister George Papandreou due later on Wednesday.
The three are expected to discuss how to address recent market turmoil, prompted by fears of an imminent Greek debt default.
'Federalist moment'
"I want to confirm that the Commission will soon present options for the introduction of eurobonds," he said.
"Some of these could be implemented within the terms of the current treaty, and others would require treaty changes."
However, Mr Barroso emphasised that the measure on its own was not enough to solve the eurozone debt crisis.
(Taken from BBC)
Here is an extract from Barroso:
European Commission president Jose Manuel Barroso has said he will put forward moves to tackle the eurozone debt crisis, which he called "the most serious challenge of a generation".
He said he would urge the 17 eurozone nations to issue joint bonds, allowing them to borrow money collectively.
Eurobonds have been backed by Italian Finance Minister Giulio Tremonti and investor George Soros.
However, Germany has repeatedly expressed its opposition to the idea.
His comments came ahead of an emergency conference call between German Chancellor Angela Merkel, French President Nicolas Sarkozy and Greek Prime Minister George Papandreou due later on Wednesday.
The three are expected to discuss how to address recent market turmoil, prompted by fears of an imminent Greek debt default.
'Federalist moment'
"I want to confirm that the Commission will soon present options for the introduction of eurobonds," he said.
"Some of these could be implemented within the terms of the current treaty, and others would require treaty changes."
However, Mr Barroso emphasised that the measure on its own was not enough to solve the eurozone debt crisis.
(Taken from BBC)
Friday, 9 September 2011
Post ECB reaction - Bund, Ftse
We had another move up in the Bund yesterday with yields getting even lower to mad levels, which suggests, its all about taking risk of the table.
Below is a review of the action over the past few weeks.
Below is a review of the action over the past few weeks.
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