Tuesday, 21 July 2015

Summer market lull, Volatility down the drain

So much for the volatility, we were trading lower with markets on tender hooks, and then in a flash the ES is trading at all time highs, Dax rallies over 10% the VIX gets smashed over 30% and its back to the new norm, which is grind up, low volumes, low interest.
Its slim pickings out there but short sterling has been livelier of late.
Short sterling has shown a steepening bias, with Jun16/17 trading around 62, with almost a 20bp move over the past few months, as comments from BoE Carney as well as other BoE officials suggesting a possible rate hike this year. I have continued to fade the red/blue month spreads on new highs, looking to nick a tick. Trying to stay away from the whites, as the back end remains more active.
Looking forward we have the BoE rate decision tomorrow which is again likely to be a non event, but other then that pretty light on the economic data front. Trading is likely to remain subdued, unless any shock events arise out of the Greek bailout negotiations.

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