What a dull day in the Bund today, when I left the office it had only done 772k lots by 16:00gmt, which is very low for that time of day. I found the price action not to my liking for most of the day and was very surprised to see that the strong Chicago pmi soon got shrugged off. Even the employment, new orders and the prices paid were all higher. Today was very much a stocks watch day with every down tick in the Dow being met with support in the Bund. Tomorrow I will be focusing on the UK manufacturing pmi at 9:30 then it will probably be time to catch up on all the blogs and weekly research until 15:00gmt. All eyes will firmly be on the ISM manufacturing figure to see if it follows the Chicago's uptick.
I get the impression that the Bund is finding support down at these price (115.85) levels and 3.94% ish seemed to hold in long before the euro started probing new highs against the dollar and sterling. Its unusual to see such a big gap on the Bund chart and I think we will probably take a look and visit it soon unless the ECB's rhetoric becomes more hawkish.
At 16:00 the yields were euro (2,5,10) 3.42%, 3.59%, 3.89%
US (2,5,10) 1.62%, 2.45%, 3.41%
Euro was 1.5847 and to stg 0.7972.
The low 5 year yield i quoted yesterday was for the German 5 year and not the eurozone 5 year. I have no idea why the two are so wide and cant help but feel these are erroneous quotes as Reuters still have German 5 years at 2.74% (DE5YT=RR) answers on a postcard please