The poor 10-year German bond auction, following on from the poor 2-year auction last week, begs the question, where is the real money headed? Investors have been selling out of Southern European bonds (with the lack of any official default leaving their CDS’s worthless), and the common wisdom is that this money was flowing straight into German Bunds. Well that doesn’t seem to be happening. Equities aren’t looking like a good bet so Treasuries and the USD are looking like the safe-havens of choice as we head into illiquid December trade.
The bears are in total control in EUR/USD and AUD/USD so if you’re a committed dip-buyer, make sure they are deep ones!
Good luck today.
