Bund Reaction to U.S trade deficit?

[Yatman1]

Any fixed income specialists out there might be able to dissect this one?

U.S trade numbers came out fri a lot worse than the predicted figure (-$36 mill on -$31 mill predicted i think)

Now, i was watching the Bund ladder and instead of ticking up it shot down (i assume following the US 10 yr but wasnt watching this)?

Can anyone tell me why there was this immediate sell off on the back of what should have been bullish news for bonds?

Thanks in advance

 

[Rhody Trader]

Can anyone tell me why there was this immediate sell off on the back of what should have been bullish news for bonds?

Why do you figure weak US trade balance figures should have been bullish for bunds?

 

[Yatman1]

Why do you figure weak US trade balance figures should have been bullish for bunds?

when the u.s bond futures come online they tend to lead the bund. Increased trade deficit = delicate economy = continued stimulus = no sign of rate increase = increase bond price

feel free to counter

 

[Rhody Trader]

Generally speaking an increased US trade deficit has actually been an indication of improving economic growth, not a "delicate economy".

 

[Fred zhang]

I agree with RHODY that increased US trade deficit actually been an indication of improving economic growth.