Tuesday, 31 January 2012

MF Global money said to have vapourised

So the thieving continues, whilst secured and unsecured creditors, lawyers and underwriters squabble to be at the head of the pack to claim there monies, its the clients that are getting the worst deal as yet theres no sign of payment to UK clients in particular. Also no one being held accountable, and the livelyhoods of many of those who have had MF accounts continue to be put under strain.
From WSJ:

Nearly three months after MF Global’s bankruptcy filing on October 31, US officials hunting for an estimated $1.2bn in missing customer money increasingly believe that much of it might never be recovered, sources said.

It is understood that as the sprawling probe that includes regulators, criminal and congressional investigators, and court-appointed trustees grinds on, the findings so far suggest that a "significant amount" of the money could have "vapourised" as a result of chaotic trading at MF Global during the week before the company's collapse.

Many officials now believe certain employees at MF Global dipped into the "customer segregated account" that the New York firm was supposed to keep separate from its own assets - and then used the money to meet demands for more collateral or to unfreeze assets at banks and other counterparties as they grew more concerned about their financial exposure to MF Global.

Louis J. Freeh, Chapter 11 trustee of MF Global Holdings Ltd., filed the list January 3rd. JPMorgan Chase tops the list with over $1.2 billion in revolving credit facility debt. Other financial institutions include Wilmington Trust, Banco Monex, UBS and Citibank.

Curiously, the global IT consulting firm Headstrong Services, LLC is owed almost $4 million in trade payable debt, good enough for number five on the list.

For details of the list of MF creditors click below:
Creditors LIST

Friday, 27 January 2012

Yield Curve Flattens

After the breakout in the TED with the european downgrades, we traded sideways how we like it before another breakout to the upside as the Shatz has reached a ceiling Yield wise. The majority of the bond moves are now on the long end as you would expect and as a result the curve has been flattening rapidly. Euribor spreads are flattening at an alarming rate too with dec12dec13 spread falling 10 fat ticks since yesterday morning. Although this was expected, it didn't do it straight away which gave us the false illusion that there wasn't much downside to go until the US markets opened and down hard it went.
For more TED spread commentary watch below:

FTSE 100 breakout

After months of heavy resistance around 5680, we broke out over the past week, and with the fed decision to hold rates until 2014 which was Equity friendly we pushed up again and now have consolidated above the previous resistance. For further details watch below:

Monday, 16 January 2012

The TED Spread breakout

We haven't looked at the TED spread for a while but on Friday we had a good and proper breakout to the upside in the TED which was unusual giving that another European country was being downgraded.
Trading the Sep12 Euribor it implies the futures are pricing in with very high probability another rate cut by the ECB. The Schatz seems to have found a ceiling around the 110.40-45 level. Watch for further details.

Ftse 100 and Bund Analysis

After the big moves accompanied by the rumour of a french downgrade, it is normal that when it did happen, it was a very muted reaction. We had bunds break 140 for the first time and we remain at lofty levels for the Bund. Watch below to see where we might go from here.

Ftse on the other hand had a false breakout from a trend downwards but has come back into the range to continue what has been very lacklustre trading in this index. We have been rnagin 100 points for 2 weeks, with no real volume to push it one way or another. Watch the analysis below:

Friday, 13 January 2012

Bunds near highs

As the European problems persist, Bunds are making a run for 140! We reached a high of 139.75 after the Italian auction which was an all time high for the Bund, as investors are in essence paying the German government to keep there money.
Stocks look to be heading for a slightly lower open as an inline earning from JP Morgan who historically tend to beat expectations will put pressure for the rest of the day.
More analysis on Monday.

Friday, 6 January 2012

Non Farm payrolls come in better

The new year has seen a largely positive tone to it as far as the stock market goes as we have had some big rises early on in the week. Bonds are nearing highs also making government bonds a very unattractive proposition in terms of return, which maybe explains why we have had such a bid to the market. This coupled with some good data out of the states with ADP beating by 150k jobs and Non farm right now coming out with 200k jobs created against 155k expectations and a fall in the unemployment rate.
The Euro however is coming under intense pressure as persistent worries over the state of Europe has pushed the Eur/Usd to 1.27 and against sterling its trading at a 16 month low of 0.82.
I can only see the Euro going down further as debt yields remain high, and it is almost certainly going to be the main story again this year.
Non farm as expected caused the market to pop up temporarily before now fading all its gains and now trading closer to flat, as much of this has been priced in I feel.
Think next week we will get more players back in the market hopefully we will see more volume and substance, and to make for some good trades.

Below is a look at the FTSE over the past few weeks:

A look at the Bund:

And finally a look at the Eur/USD:

Short Sterling spreads nudge higher on hawkish Fed; Walmart blowout

As most must know trading Short Sterling is a bit of a bore, and has been for a while. Having managed to get out of my 2 month hold before,...