Thursday, 3 April 2008

Lacking direction

Yields across the curve fell slightly from yesterday in what was a lackluster days trading. The surprise was the Eurozone Retail Sales figure for February that was expected to show a 0.2% rise. However this came in at -0.5% mom, this lead to a bit of a rally in price. What was more of a worry in the figures was that Germany, the most important of the Eurozone countries, registered a fall in retail sales of -1.6%. I think this is quite significant and shows that perhaps the economy is not as robust as we are lead to believe.
We had the Service NAPM out of the states in the afternoon and this showed a small uptick but didn't lead to much action in the fixed income. Once that was out the way the market tread water, with all minds fixed on tomorrows NFPR. The German factory orders may provide some short lived interest tomorrow around 11 gmt but after that we will have to wait for the 1:30 lottery that is Non-Farm. We had another Doji today in the Bund and shows that there is much indecision in the markets down near this 4% yield. Only a higher than expected figure will lead to its breach. Given the very high Jobless figure today (Easter calculation issues apparently!) we would have to be thinking that NFPR will be on the weak side.
At 16:00 the yields were Euro (2,5,10) 3.50, 3.68, 3.98 and the US 1.87, 2.70, 3.56.
Euro was 1.5613 and 0.7834 against Stg.

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