European Bond Market Preview 2/07

Discussion in 'Trading' started by TradeTheNews, Feb 7, 2007.

  1. TradeTheNews

    TradeTheNews ET Sponsor

    - European government bonds were mixed yesterday after a bit of technical trading.
    - The focus in today's session will fall upon German industrial production for the month of December, which is expected to fall to 0.5% from November's 1.8%. Keep in mind yesterday's December factory orders figure, which came in much lower than expected after consumer goods demand from abroad dropped. Some analysts see yesterday's factory orders increasing the dowside risk for today's industrial production data. Industrial production is due out at 6:00 ET.
    - The ECB's Weber said yesterday that the ECB will do everything that it can to fight inflation. Weber said that the Euro has been sucessful, and noted that central banks are not at fault for the EMU growth divide.
    - In the UK gilts were relatively unchanged yesterday with the short end underperforming the long end after BRC retail sales for the month of January reached a 3 1/2 year high late the day before.
    - The focus in today's session will be industrial and manufacturing production for the month of December, due out at 4:30 ET. Both figures are seen falling from November's levels.
    - Overnight Nationwide Consumer Confidence fell below estimates for the month of January. Although data fell below estimates consumer confidence was one point higher than November's two year low, hinting that consumers are shrugging off the Bank of England's past three interest rate hikes.
    - The UK DMO sold £2.25B in 4.25% 40-year gilts yesterday with an average yield of 4.159%, and a bid-to-cover of 1.56. The bid-to-cover was below the previous bid-to-cover of 1.7, and the neutral bid-to-cover which was called at 1.76.
    - Overnight in the US the FED's Yellen reiterated that, aside from the housing and auto sectors, the US economy is doing well. Yellen said that she is not convinced that the unemployment rate will supr inflation, reiterating that inflation is still higher than she would like.