Written By: Pauly @SPZ_Trader
Friday’s continued sell-off in the bond market caught the attention of all traders no matter your trading vehicle of choice. Yes, Virginia the bond market’s tentacles are quite lengthy.
The sell-off started about a week ago with the disappointing action following a weaker that expected Non-Farm payroll report (151k, coupled with .1 wage-gain growth). The bonds spent the early part of this past week retracing NFP Friday losses, and briefly eclipsed those highs perhaps in anticipation of a little more juice (Quantitative Easing) from Mssr Draghi at Thursday’s European Central Bank meeting. Well, Draghi did not provide what the market had hoped for; at the very least extension of QE beyond March 2017. Most realize the ECB is handcuffed when it comes to available assets to purchase, so the market was counting on a definitive extension of the program. Bunds felt the impact and summarily Bonds too.