13 March 2014 ~ A quiet morning but an exciting afternoon

There was very little news to excite the EU session traders this morning, with not even the publication of a Think-Tank Report to generate interest!
But things certainly started to heat up as we approached the US opening bell:

* The key pieces of scheduled data for the day, US Advance Retail Sales & US Initial Jobless Claims came in close to expectations – although I did notice a serious exchange of contracts on the US Treasuries, with sellers seeming the slightly more urgent.

* Around 13:30 London time, Goldmans and Barclays reduce their US Q1 GDP expectations, and the US Treasury market started to churn higher and higher alongside FGBL, while ES and FESX conversely started to melt. Was this a reaction to Goldmans analysis? I doubt it was and without any specific news item to pinpoint as the driver, I’m chalking these impressive moves up to general market sentiment on the day.

* Perhaps most worthy of a spot on the Harry Hindsight Highlight Reel, was a statement released from ECB’s Draghi, saying real interest rate spreads between the Eurozone and rest of the world would probably fall, putting downward pressure on exchange rates. While FGBL remained very calm in light of release, 6E jerked lower repeatedly – although the move was far from clean and I expect money was lost by some Shorters too!

* By the time the results of a $13bn US 30Year bond auction came out (at 17:00 London time), the Treasury market had already moved far enough for one afternoon session and neither the Longs nor the Shorts had enough reason to shift price.

All in all an interesting afternoon session and a good opportunity to snatch some ticks on Draghi’s words.


11 March 2014 ~ 09:45 London Time ~ ECB Constancio makes a statement

Gods. It has been a nightmare trying to produce a reasonably sized (in MB) 3 minute video, but finally I’m more or less content. Note: A time delay of several seconds exists at the start of the video before Youtube finally kicks in with HD, which is necessary if you actually want to see clearly the numbers!

There wasn’t a great amount of key news to review today, and no scheduled data to get excited about either. Some markets did nevertheless put in considerable moves, namely the energy markets, and after the US opening bell, the S&P 500 too, but there was only one small item worthy of a slot on the highlight show tonight I feel (see below). I’d call it a 2/10 on the Hindsight-Impact scale…

ECB Constancio says a few words, suggesting that markets did not fully digest the ECB’s most recent statement, and that further central bank action is not off the table entirely.
I was somewhat surprised by the lack of follow-through on the downside on 6E. After several minutes the market settles and drifts back to a more central trading range.
No doubt some of the slower (human) traders lost a few ticks as they fully expected the market to drop a good bit further.