Strength in European Market Helps Bonds Rise

 

 

Bonds
The March bond contract [ush0>ush0] rose marginally Monday on continued follow-through from Friday’s relief rally. Strength in European bond markets also helped the bond bulls. We still view the economy as gaining strength and view last week’s rally as a short-term trading move. We will look to sell this market Tuesday at the 94-05 area. 

Currencies
December Swiss francs[sfz9>sfz9] advanced substantially Monday on short-covering after German reports of a stronger economy came in which caused a huge wave of short- covering. As is common these days, most traders started covering their positions at the same time, thus the big up move today. We covered our position as well on the close at the 6400 area and will look to resell this market again. We had expected a move like this but not to this magnitude. Note: Starting immediately, we will begin trading Euro currency futures on the CME.

Stocks
December S&Ps[spz9>spz9] had the correction we had anticipated but the Nasdaq still managed to close up Monday. We view this as a strong sign for the overall market and will move our profit target up to the 1421 area for Tuesday. We were surprised to see the Nasdaq up, which shows that money is continuing to pour into tech stocks. Had the Nasdaq been down Monday, we would not have moved our profit target up. This is a sign that investors still have an appetite for higher- risk tech companies which should continue to support this market.

Next update: Wednesday, December 8, 1999.