Thursday, 20 February 2014

Euribor Spreads Push Up as Equities continues its move up

After lying at levels I haven't seen in a very long time, today we got the lift in Euribor Spreads which made good on long 4s, in Mar15Jun15, 5.5 in Jun15Sep15, although bad PMI data from Germany and France will most likely mean this is a short lived bounce and we will come back down to those levels again.
I will be looking to buy at 3.5s and 4s in Mar15Jun15 all day long, and keep trying to flip it for 1/2 a tick, as I think the downside is minimal as I really cant see negative rates coming. But if that is the case then I will react to it accordingly.
It was a weird day as Equities looked weak, and Bonds were bid until Philly Fed data, and a terrible number initially pushed the market down more, and then we had a total reversal. A standard pattern of late where they buy up any weakness and as usual shrug off bad data. They blame the snow for the bad number, but it was still a bad number, but it probably was more of a QE thing, where by bad data mite reduce the pace of QE tapering. We most likely will make back everything lost yesterday in Equities cause these dips don't last long, although on any normal day this should head back down. Tomorrow is option expiry, so might cause some wild moves in some commodities, especially Nat Gas which has been moving like a nutter, spiked 500 ticks over night! Will be interesting to watch.

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