So after the big (overdue) sell off in equities, the market piled in the safe haven securities again as the Bund broke 139s and is heading towards 140. What was notable was the volume was much greater yesterday suggesting there could be further to come.
This in turn has lead to falling spreads, and my longs from yesterday were in trouble yesterday afternoon. Being long Mar13Jun13 6.5, the spread quickly fell to 6s, and then were trading small 5.5s, I managed to get long Jun13sep13 at 6.5 and took half tick on that to then take myself out at 6s on Mar13Jun13 and I'm glad I did too as this is now trading 5/5.5s. Normally I would look to buy around there but with the four day weekend coming up, I will wait till tuesday to see if its still there. Dec13sep13 fell also bought more at 8s and got out at 8.5s.
Its often the case when it looks like its a daft idea going long as spreads are going down that we then get the big reversal which has proved to be the case twice in the past month already, so unless anything significantly changes I will still look to go long at these levels.
Below is some video analysis of the moves in these spreads:
Have a happy easter!
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Thanks for the video
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