IIFT Daily Note with Peter Brown

Bonds and Fx to open unchanged

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We were expecting a lower open but in the last hour German GDP came in better than expected. This has given the Euro a small boost 1.2860.

Last night Moody’s downgraded 26 Italian banks. The bad news keeps comming. Outside the German figures, turmoil in Greece and Spain continue unabated. Yesterday we saw new lows in the S&P and the Euro and despite an attractive Gap play the market was too bearish to attempt it.

Today we are starting a little higher but watch the Spanish Ibex and the bond yield for clues. We are due a correction, which will come soon. A lot of figures out today so watch them closely also. The trend is still down so any decent rally is a sell.

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