Tuesday, 29 April 2014

Choppy Trade as Market Looks for Direction

So I have been away for the past couple of weeks, but having come back yesterday, it seems nothing has really changed, Euribor Spreads are trading roughly the same levels as they were a couple of weeks ago, maybe a bit higher, Bunds solidly over 144, and Stocks are having some whippy price action but with the bulls seeming to win the battle as always.

Yesterday there was an initial rally in Euribor Spreads which given the way they have been smacked back down every time they rally, I decided to short. I went Short 5s in Jun15Sep15, got some 6s and 6.5s in Sep15Dec15 and 8s in Dec15Mar16. I managed to get this pretty early as some of the German CPIs gave an offered tone to the Bonds. It was your normal wait but the Spreads all came down as expected and gave good for 1/2 a tick.
The price action was better then earlier in the month so hopefully this is a sign of some improvement.
Looking ahead we have FED rate decision tonight, so although it will most likely be you $10Bln taper its unlikely there wil be any other significant news but you never know so will be ready for anything. Lastly Friday we have NFP which is always a biggie. Hopefully some good opps over the next few days.

Wednesday, 9 April 2014

Dovish FED lifts Stocks

The FED was more dovish then their initial statement not mentioning Yellens remark that a 'considerable period' for the first rate rise and the end of QE is around '6 months'.
This boosted the market as the Nasdaq as up 70 points for the day, and Bonds traded higher  with Spreads coming down to previous lows. Its typical that the FED still holding this market like a premature baby not wanting to do anything that stops the Equities march higher and higher. It looks like at this rate the FED will never have the bottle to pull the trigger on rates and it will stay like this for years to come, as the new normal is this economy is what it is now.
I'm looking to buy Spreads this morning averaging if needs be but judging by the volume it looks like its going to be another hard grind.
At 12pm we have the BoE rate meeting, so hoping for some volatility off that, but its likely that Indices will continue its grind higher, and Bonds will be going higher also.

Monday, 7 April 2014

Stocks getting hosed after tepid NFP

So Friday was the perfect storm, a sub par NFP, then the predictable rally, (since they rally on everything these days), then the realisation that this Stock market has run up way too much, and the aggressive sell off, which has continued into today. The Nasdaq has given up 146 dollars in the past 2 sessions, which is some very aggressive selling, especially in some of these momentum stocks that have run up like crazy with some crazy valuations with Netflix, Amazon, Facebook being notable losers.

Bonds pushed up on the back of the idea of a longer period of easy policy as well as a potential QE from the ECB. Euribor Spreads came off aggressively back to the lower end of the range, which gave the opportunity to buy it all the way down. This morning gave further opportunities to load up some more, and I managed to go long 4s in Jun15Sep15 and long 6.5s in Dec15Mar16 and as has been the case over the past few times its been down to these level it had a small bounce for half tick, before making its way back down again. I will look to reload again tomorrow morning, if the spreads are still trading down there.
The best thing right now is to take small profits as any pop up is being met by selling so until the bias of the ECB changes, scalping is the best play.
Going forward the week is pretty light in terms of data, with the main event being the BoE rte decision on thursday, so until then its a matter of nicking ticks.

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,...