I have been talking about it all week, when In A trend markets will ignore all information that refutes it. Yesterday ECB sources said markets misunderstood Draghi Comment from Tuesday Morning, he was neutral not hawkish. This momentarily slowed the Selloff in bunds yesterday. This Morning it is German Inflation, which is released on a State by state basis and at different times throughout day that has applied the pressure. The First of these states to release Data was at 2:00 A.M. Inflation was a touch higher than Forecast and down went bunds and Buxl and up went the Euro. Reflate, higher rates trade in full swing Bund yields +20 Bps and Buxl +19 Bps since Tuesdays lows, Euro at 9 month highs up above 1.14 handle. Also weighing on Fixed Income the higher price of Oil as it works on its 6th consecutive higher close. Not Just German 10 year yields moving higher. Irish yields +10 Bps Spain +8 and Italy +9 Bps. No more QE!! This continued sell off in European Bonds is weighing on US as Well.10 year yields +17Bps and 30 year yields +15 Bps last 3 days. Summer doldrums no more! Besides German Inflation Data German Consumer Morale At highest level since 2001, Eurozone Economic sentiment highest in 10 years. Treasuries losses accelerated as they broke Wednesday’s lows volume is big.
European Stocks Steady to lower nowhere near the panic we saw yesterday. Spoos + 5 handles and NASDAQ -17. I still believe Some Month End Quarter end gyrations going on in NASDAQ. Second tier Economic data today so that will not be a driver of Action.
Position Unwind of the ECB QE trade will the main focus. Gold -$4 and Copper +3 handles
Spring wheat continues to be on tear another 25 cents today and +80 cents this week. Big crop report tomorrow