1. Bonds also fell as rate hopes faded. 2. German bank shares were also boosted by the rate cut hopes. 3. German government bonds rose as forecasts of slowing growth and a cut in the securities repurchase rate lifted hopes for another cut in the floor discount rate. 4. German rate cut hopes were further eroded by an upward revision in June factory orders. 5. On Friday, bonds recovered after plunging on comments from Bundesbank Chief Economist Otmar Issing that further dampened rate cut hopes. 6. Rate cut hopes sparked a wave of foreign investment. 7. Slow German inflation, sluggish growth and rate cut hopes are keeping bunds more attractive to investors relative to their U.S. counterparts. 8. The Bundesbank has managed to keep rate cut hopes alive without stirring up concern about faster inflation. 9. The dollar-mark relationship that fueled rate cut hopes in March is the very thing serving to undermine them now. 10. Those rate hopes are reflected in the implied yield on the June three-month money market future, a barometer of interest rate expectations. |