Friday, July 05, 2013

Draghi, low interest rates and the Bund

Mr. ECB commited the ECB to low interest rates for an extensive period of time. The German Bund futures reacted by jumping 1 full point from 142 upto 143.

FGBL 60min 2013-07-05

But 18 hours later we are back down to 142.30. Something one wouldn’t expect, if rates remain low for an undetermined period of time. Bund traders might be squirmish about the NFP data released later today, but for now it seems the market might call the ECB’s hand by taking interest rates higher regardless of Draghi’s words.

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