A bit of activity is showing just while we writing. Basically the anticipation of aggressive easing by the Chinese is refraining investors from “shorting” too much. As we said last week, looking at the statistics it looks like the world is short.
The morning news is: the Italian Btp auction hours after the Moody's downgrade. The Italian Government auctioned :
- 3.5 billion Btps July15 at 4.65% average yield, at previous auction the average yield was 5.30% (a bid to cover ratio at 1.73).
- and 1.75 billion Btp March22/August23 at an average yield of 5.82%, at previous auction it was 6.19%, a bid to cover ratio 1.74 for Btp22 and 2.33 for BTP23.
Therefore not bad for a country downgraded few hours before the auction. While we writing European futures are inching higher with DJEurostoxx50 0.72% higher at 2242, German Dax up 1.33% to 6509. Will this “lunch rally” last?
In few hours US Macro data will be released, we will see if they will be able to support this movement or will increase investors concern.
After having traded at multi-year low the Euro/$ cross is up 0.06% to 1.2213$, for sure the Italian downgrade didn't help.
It's Friday, therefore play safe.
Originally posted at www.77sigmatrading.com
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