morning 6-18

Bullish Draghi, I guess

LONDON, June 18 (IFR) – Draghi has done it again with his Sintra speech  and the markets are listening with yields down sharply across the board and yield curves (except Italy) bull flattening. The rate cut expectations are not only visible in OIS pricing but also in the 2y where core/semi-core yields here are down some 5/5.5bps. But it’s the 10y that is grabbing the most headlines and the move here has been relentless, with the 10y bund yield breaking through -0.30%. Other core/semi-core bonds have tagged along for the ride and most notable here is that 10y Austria and 10y Finland both finally trade through zero and join the negative yield club.

A bit of an aggressive move based on draghi comments I believe but are we to argue with markets Bunds +120 ticks yields -7bps BTPs +190 ticks -18 bps Greece yields -20 Bps! Long end Buxl +325 ticks -7.5bps 30 year Italian yields -13 bps U.S. 10 years closer and closer to 2 handle yields -7 bps tradind 2.02% 30 year yields -6 bps trading 2.52% ECB rate cut probability were 2% for July meeting ,post Draghi comments, stand at 30%  just crazy talk. All European Sovereign yields are lower today as QE fever is back.

Bonds rent the only rally in town Stocks Higher Italy’s Mib +1.8%, Cac +1.6%, Dax +1.44%, Ftse +1%, Spoos +.6% nasdaq +1% Buy em up! Euro down 30 ticks and trump none to happy tweeting out his displeasure Saying “Euro are and china trying to gain an edge by weakening Currencies”. Copper =+3 handles +.9% Gold +.7% Fridays highs of 1362.2 next a rea of concern and lastly Silver +.8%  as precious metals are bought as rates head towards zero. Corn -1.5% a Demand destruction Conversation takes shape


7:30 Housing starts after yesterday’s dismal empire Numbers

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