§ US Treasuries profit from plunging equities Treasuries continued their bull run as equity jitters stoke demand for super safe assets. Global economic outlook deterio-rates, but financial market stress looks a better reason to explain yesterday's price action. Equities are on the verge of re-testing the cycle lows. Will the US payrolls bring the markets to a climax?
§ Bund breaks above recent highs improving the technical pictureYesterday, the ECB as expected left rates unchanged and signalled no plans for an early rate change, as upside inflation risks still prevail. Bonds however rally higher on plunging equities with the Bund breaking above the recent highs thereby improving the technical picture.
§ Euro hammered. EUR/USD tests key long-term support levels A new flaring up of investor risk aversion showed the new hierarchy on the currency markets. The yen is still the preferred safe haven; the dollar becomes a good second best. The euro shows highly sensitive to global negative headlines. Re-markably, even sterling yesterday tried to gain some ground on the euro.
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