IIFT Daily Note with Peter Brown

Spanish Bonds Italian Banks

Posted by:  |  Time: 7:45 am  |  Topic:
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It was an unusual day yesterday. S&P fell 250 points, basically in a straight line. The negativity in the market far exceeded my expectations. I was sure the 1370 level would hold. I’m afraid not. Unusual to see such a sell off without a correction. Eventually we got a 100 point bounce after market closed.

The move was caused by Spain and Italy. Spanish bonds fell all day and yields hit 6% in the end. The Italian stock market at one stage went limit down.

Today’s outcome will be based on how these market react. Picking levels is not easy. Euro/Usd was pretty steady yesterday 1.3060  to 1.3160 range. Basically this is a stock market move and FX is slightly sidelined.

Gold held at 1635 and is now at the top of it’s range at 1660

The S&P broke through down side support at 1370 so this should act as resistance today. We need to see the bond market action to get a direction here.

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