It's becoming harder to believe that the ECB will only raises rates once with confidence high and policy makers sounding hawkish. The short end of the bond market will remain under pressure.
More Quotes from Kornelius Purps:
The ECB has signaled that if there was any risk inflation expectations would run away, they would contain them. With this central bank rate-hike cycle, it may lead to a flat yield curve by April.Kornelius Purps
Yesterday's ECB press conference November 3, 2005 was great entertainment. Having not heard of Goethe very often in trading rooms as happened yesterday, here's my personal favorite from German philosopher Friedrich Nietzsche that sometimes describes life as a research analyststrategist Das habe ich getan, sagt mein Gedchtnis. Das kann ich nicht getan haben -- sagt mein Stolz und bleibt unerbittlich. Endlich -- gibt das Gedchtnis nach.
Kornelius Purps
Assume that a time machine is beaming you back to Monday morning. You start the week with the impression of an unexpectedly strong 274k US payroll report in mind. In addition, a clairvoyant tells you that 1) US retail sales surged by 1.4 m-o-m in April, 2) German growth advanced by 4 q-o-q annualized in Q1 2005, 3) speculation about a revaluation of the Renminbi will intensify, 4) the oil price will fall by about USD 3.50 per barrel this week, 5) and the US Treasury will sell USD 51 bn in Treasury Notes. You make up your mind and conclude that in this environment yields need to go up. At least 99 out of 100 market participants with the same information would have shared your view. But reality is different. Yields are down and down and down again. These are Schwarzenegger markets, no one can beat them.
Kornelius Purps
It's yet more bad news for GM and we can't rule out the possibility of even worse to come. Given the big sell-off we've had in Treasuries, this is a good time to buy.
Kornelius Purps
The ZEW indicator is at levels which previously have marked a high, and discussion will now start on whether the ECB will hike rates earlier than in March. This will put the front-end under pressure.
Kornelius Purps
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My heroes are those who risk their lives every day to protect our world and make it a better place - police, firefighters and members of our armed forces.Sidney Sheldon
In America, we have to learn to be patient enough to figure out what somebody is saying. Somebody might actually be saying something.
Stanley Crouch
Those who weep recover more quickly than those who smile.
Jean Giraudoux