German Bonds Slide after Auction, while Spanish Debt Surges on the ECB.

German Bonds fell after bonds that were due to mature in July 2022 were sold at a record- low yield of 1.77%, however only € 4.11billion worth of bonds were sold, compared to the target of €5 billion.

Spain seem to be far from out of trouble as their 10year bonds yields retreated following comments from the countries prime minister that pledged further austerity measures this month.  The European Central bank hinted to the possibility of more bond buying, however gains seem limited as Spain struggled to gain support for new austerity measures.

Markets are in consolidation mode as US data had little impact on the dollar with jobless claims falling to a four year low. The Fed also reiterated that employment would rise very slowly and that the interest rate would remain low for the foreseeable future. The Fed also confirmed that although the operation twist is coming to an end this June, it does not mean that they are tightening monetary policy.

Sterling weakened yesterday against the euro and eased against the dollar. With a lot of data coming out today we could experience considerable volatility in the markets, so it will be a good time to hedge against your risk.

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