Bund yields rose once again overnight, testing last week's melt-up 77bps top briefly but have 'stabilized' as US markets come online hovering 1bps lower. As bund prices have collapsed so it appears knife-catchers have been busily leveraging up with Call option open interest soaring dramatically (and put option open interest). This has smashed the put-call ratio from multi-year highs in mid-March (before the collapse began) to 6-month lows now. Whether this is a contrarian's dream is unclear (suggesting that there is further price downside as the weight of positions are skewed to the upside is unclear).

Bund yields are 'stable' this morning...

Bund Futures Put-Call Ratio tumbled to 6-month lows...

Was this plunge in Bund futures prices a huge option-market-driven squeeze? Or did the ECB 'engineer' it to give themselves some more runway on QE?

Charts: Bloomberg