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Strategies & Market Trends : January Effect 2003 -- Ignore unavailable to you. Want to Upgrade?

To: Londo who wrote (188)	3/6/2003 5:35:57 AM
From: RockyBalboa	Read Replies (1) \| Respond to of 666

Today the bellwether ECB interest rate decision is due, at 7:45EST. Most believe it will be a 25bp cut but some observers call for a steeper 50bp cut thanks to the weak economy. That said, a 25bp cut could tank the European treasuries because more than this is priced in. The Future did a half hearted run close to its new contract highs (and also close to the old 117 level in yields), but sold off since and is barely in the plus, while the shorter maturities are in the red for the day. (thus the curve is flattening a bit which is not unexpected - the long end should always react more). I also bet for a 25bp cut and that the (10y) futures end the day thoroughly in the red then. But I can be wrong, so I'm not betting the house on it. Trading appears to be heavy and quite volatile and there a lot of pairs going off which trade on the flattening of the curve which would hint on the bigger cut. On the other side, the European stock markets and the Euro is selling off from their optimistic opening.

To: Londo who wrote (188)	3/6/2003 7:54:08 AM
From: RockyBalboa	Respond to of 666

ECB cuts key rates by 1/4 to 2.50%. Stock dropped, bonds recovered early losses, trade flat. Both Dax and ESTX50 lost 1% quickly after the decision.