1.Take a look at an hourly candle bund chart, 34 was a big technical level, going past that defined the "W" double bottom.
2.All the stops hit would have been placed there on Friday 18th after Trichet came out with his first "we will augment rates" comment which sent the bund into freefall. To many people that was a one way ticket put a stop in and go on holiday, rate hike cycle has begun.
When he rubbished rumours on Monday about there going to be a series of hikes and in fact it would be just one and wait and see, back up we go. With the IFO at the lower end of the range and the CPIs all coming in -0.5 suddenly a hike looked completely wrong for germany. The ECB would actually be breaking its own rules by hiking if it were only considering the german data.
Several firms then started calling for a good 2-2.5 point rally in bunds middle of the week.
If I'd held a short on those first Trichet comments my stop would have been in the mid to high thirties, it makes sense on the chart. As we all think alike including the institutions bang, up up up. Most people I work with pulled their offers up the page when this level was being approached. Trichet was the cause.
2.All the stops hit would have been placed there on Friday 18th after Trichet came out with his first "we will augment rates" comment which sent the bund into freefall. To many people that was a one way ticket put a stop in and go on holiday, rate hike cycle has begun.
When he rubbished rumours on Monday about there going to be a series of hikes and in fact it would be just one and wait and see, back up we go. With the IFO at the lower end of the range and the CPIs all coming in -0.5 suddenly a hike looked completely wrong for germany. The ECB would actually be breaking its own rules by hiking if it were only considering the german data.
Several firms then started calling for a good 2-2.5 point rally in bunds middle of the week.
If I'd held a short on those first Trichet comments my stop would have been in the mid to high thirties, it makes sense on the chart. As we all think alike including the institutions bang, up up up. Most people I work with pulled their offers up the page when this level was being approached. Trichet was the cause.