Thursday, 19 May 2016

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, the dip lower a couple weeks back gave me the opportunity to go long again. I'm mainly weighted to Jun18Sep18 long 4s, and it seems like I'm waiting an eternity to get out. Yesterday's FED minutes showed that the door has been left open for a possible June rate hike, which had dropped Gilts to two week lows, with Equities under pressure as a result. On top of this stronger retail sales figures added weight to the steepening argument. Yet the continued down turn in stock pushed gilts higher and hence flattened the curve a bit and now we back at square one.
EUR/USD trades back below 112, dropping over 400 pips from month highs, short of the century up there. Hind site is a wonderful thing of course. Dollar strength put Crude on the back foot, Brent and WTI down over a buck.
Walmart had blowout earnings, beating handily on the top and bottom line, guided Q2 well, helping the stock to trade 9% higher having traded at 5 month lows prior to the jump. Despite this the Dow is down in line with ES and Nasdaq. Traditional retailers in general have struggled in the quarter, with the likes of Amazon continuing to rule the roost with the retail sector. The retail ETF trading at 4 month lows.
Stock in general look to be turning, rallies are being sold off, a sell off seems to be looming, with June eyeing a potential rate rise in the US and the Brexit vote in the UK will likely bring much needed volatility.

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,...