US Treasuries at first corrected lower, even sharply at the longer end due to supply concerns. However, the intensification of the banking crisis pulled equities sharply lower. That renewed safe haven bid supported Treasuries further out.•Is Bund correction over?
An unattractive calendar in euroland will leave room to the general sentiment to guide market action. While we recently advocated profit taking on the view a correction was needed, we now think that this correction might already be over, as equity markets seem ready for a decisive test of the cycle lows.
•Euro side continues, sterling comes under pressure again
A negative global environment keeps the euro in the defensive against the dollar. The yen gains, but the decline in USD/JPY remains moderate for now. The pressure on sterling is mounting again after the UK bank plan and as the probability for the BoE to shift to unconventional measures is rising.
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