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.

ADP Surprise.

Relatively dull day in the Bunds today. In the morning we flirted with 3.98% but the price was well supported and was unwilling to test 4%. The afternoon was where most of the action was. The ADP started things off with surprise to the upside +8k(exp -40K) This sent the Bunds and the Treasury's lower. The flatners started to be added across the curve and the Bund poked up to set a new high as Bernanke seemed slightly less positive about the economy. However these gains soon reversed and towards the close of the cash a size seller came in and pushed yields through the 4% level. This pushed the future down to score a new low at 115.04. After a short battle at the low the losses were just as quickly reversed and the Bund traded back to the middle of the profile setting the stage for an almost doji candle. This is typical of a market trying to gauge its short term direction as the key 4% level is tested and defended time and time again. Tomorrow perhaps will set up more directional trade although we will probably have to wait for the ISM non-manufacturing at 3pm for this. The morning however does offer the eurozone pmi services and the Retail Sales for Feb.
At 16:00 the Yields were Euro (2,5,10) 3.57, 3.74, 4.01 and US 1.91, 2.75, 3.59 Most of the movement in both curves occurring at the front as the twos rallied 6 and 14bps respectively to flatten out the curves. The US Curve moving more as Brokers started to suggest that Bernanke's rhetoric was making sub 2% rates look less likey. Euro was at 1.5612 and against Stg 0.7879.