After trading in a very narrow range, with hardly any volume, we broke up in these Euribor Spreads, with no real pull back on the way up. Jun14 Sep14 went from 6.5s to 8.5s, Sep14Dec14 went from 7s to 9s, and pretty much we had a 4 tick price movement along the mid part of the curve.
Now looking at a longer chart, it looks like a perfect trade, being long the bottom of the range, and now watching it push up. But as a day trader, with such a narrow range in the past week I have been inclined to sell it, and this got me in trouble as I had to average aggressively as it went up.
Thankfully we had a rally in the Bund today, after the large drop yesterday and this gave me my out in these spreads. In all ended up being a very roundtrip intensive day but its a nice change to see some action in the short end as its been dead recently.
Else where, as I thought last week this Bund has come off the channel at 141.50s and has pretty much gone down 200 ticks since, on the back of positive news from Europe and upbeat data from the US, including a positive Philly Fed report, all conveniently before the US elections. Its still up in the air who will win the election but I still think we will get good data out, but with the Bund in a range between 139-142, so I think we are likely to push up mid range sooner then we go down.
Not much more data out for the week, so the market will be dictated by Earnings, and the usual remarks out of EU officials.
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