Thursday, 31 October 2013

EU CPI down to 0.7%, Spreads Drop!

After a slightly more hawkish FED then had been anticipated, we had a welcome move up in the Spreads, which I had been buying all the way down. It gave me my out luckily, and my out in Short Sterling, which was a Tedious hold. Luckily enough I got out this morning, because  at 10am UK time, Eurozone Flash CPI estimate came in at 0.7 with an expectation of 1.1%, a big miss! This massive miss had prompted many to forecast a potential cut in the refi rate in December by 25 bp. This intern gave the Euribor a big bid and Spreads dropped, which gave another nice opportunity to load up long again. There were quite a few 5s available in Dec14Mar15 which I think was a bargain price, as well as 11s in Dec15Mar16 which was good value in my opinion. After a strong Chicago PMI out of the States we then pushed back up in these spreads giving 2 tick profits for all 3 months spreads, although I only took 1 tick, but either way it was a much better day of action then what we have been used to this week, with all the low volume drifting.

October in general has been a very tough month, I managed to make a profit, but not many big up days, many small £100-£300 quid days, but they all add up, and I patiently wait for the good volatility, which could arise next week as we get into the slew of data which is coming out, plus ECB rate decision which will be interesting in light of this CPI number.

Friday, 25 October 2013

Shut Down Ended, Same old Markets

So with the US Government finally sorting out there issues temporarily, we have only really seen further Equity upside and a gradual narrowing of Spreads across the Euribor Curve and Short Sterling Curve. This move down however is the worst kind, one where it just drifts, so this past week I have just been buying, trying to scalp half tick here and there, but its been pretty tough. I amassed quite a big long position in Sep15Dec15 and Dec15Mar16 Euribor Spreads, as these have come down over 2 fat ticks over the week, and I have been building a long position, even though we probably will continue going down further, but today I managed to get out for small profit, after buying alot of 12s in Dec15Mar16, and getting out the whole position at 12.5s.
The reason why I'm going long is that the shock factor will always push this higher, where it may be some data or comments, and as we have come off pretty big since the no tapering Fed Meeting, I just feel more comfortable being long then short.
Now that tapering has been predicted to be pushed back till next year March, looks like the volume will pretty much drift away as we approach Christmas. So In that respect hoping for some good news that might force the Feds hand, but doubt it will happen.
Next week we got quite a bit of data out which is always nice, so hoping for some opportunities from that.

Wednesday, 16 October 2013

UK Job Numbers Beat Expectations!

This was a weird number this, as we had quite a big beat, yet Short Sterling went up! And quite hard to the upside too, and while trying to fade the move, had to bail out at the end, for the fade to eventually happen!
It seems this move was due to the unemployment rate which was still at 7.7%, so it seems that this is the number to focus on as far as Short Sterling is concerned.
Cable had a pop up then quick fade, but as usual the number seems to have been leaked, as you can see below. We had a 35 tick push up in cable where as in the same time the Euro moved up 5 ticks, so happy days for some!

In other news, markets are still awaiting a resolution to the US Gov Shutdown and debt ceiling, which will be resolved tonight or tomorrow as this is the deadline, which is in theme with the usual last minute deal. It would all just be easier if they can do this at the beginning, but it is likely that the extension will be till FEB and so we will go through all this again!

Monday, 14 October 2013

Volumes falling as Uncertainty Remains

Volumes across many futures markets continue to fall, and trading is becoming increasingly difficult, as uncertainty regarding the Debt Ceiling and the Government Shutdown keep players out of the market. Also lack of news from the US is not helping matters as many big events have been postponed. Making money right now is like squeezing blood from a stone!
Check out these volumes in Short Sterling today, given we have almost had a full trading day!

Although this is in part is due to a US holiday, its still some of the lowest Volume i have ever seen. There has only been roughly 45k lots traded across these 7 contracts, which just make it pretty much untradable!

Sort this out US Politicians!

Wednesday, 9 October 2013

Could the US Default?

OF COURSE not, what will happen is they will string this along to the very last moment then thrash out a deal. In the mean time we just have to endure this back and forth crap from the Democrats and republicans, and in turn we all suffer.
I'm sure those who are trading can agree that conditions have been tough to say the least. Euribor and Short Sterling just aren't moving, volume has dropped off, and no data to help push things one way or the other. This has left me to just fall asleep at the screen for the past few days, lucky to eek out small gains. Times like this I wish I was a good outright trader, but as far as the Spreads go getting into a Spread has been difficult.
Either way the trend seems to be down, which means I will be looking to buy at these levels. We have the FED minutes tonight so hopefully that will put some spark into these markets, but other then that lets hope an the US Gov can sort there issues out soon!

Thursday, 3 October 2013

Government Shutdown and ISM Misses!

We are into the second day of the Government Shut down in the US, Markets have remained strong shrugging off pretty much everything in the process. The Nasdaq remains very strong, with the usual pattern over the past few days being, weak open, then gradual grind up the rest of the session, its remarkable how it keeps going up despite already being up 25% this year, and no real catalyst to warrant this level.
However with a big miss on ISM Non Manufacturing,  pressure has been put on the Stock Markets and pushed Bunds back above 140. Although I suspect the Nasdaq will rally to almost flat come the end of the session as has been the pattern of late.

Euribor Spreads have maintained its narrow range, as Draghi didn't offer any surprises in yesterday ECB meeting and it being a German holiday today.
In general its been a very tough few days in trading STIRs as volume has dropped off a cliff and its generally like watching Paint dry right now. Hard to make anything at all, but as always best not to push it when the opportunities aren't there and just wait for things to get better.
Normally I would be excited at the NFP data which is due tomorrow, but due to the Government shut down this will not be happening, so likely to be another slow day tomorrow too. Lets hope this all gets solved soon!

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,...