Bit of a hairy moment this morning having been short the spreads overnight, we had a 2 tick gap up on many of the front month 3m Euribor Spreads, which put me immediately offside. Its the worst case scenario usually when you hold overnight, but the weirdest thing is I cant find a definitive reason for the jump up.
Either way I shorted everything I could, selling 8s in Sep14Dec14, 7.5s in Dec14Mar15, 8.5 in Mar15Jun15, and 9s in Jun15Sep15. Luckily they all retraced, and in fact I ended up getting out too early as the spreads are looking to fill the gap.
Either way there's alot more action then there has been which is encouraging. Bunds have come off quite a bit trading now at 143.42, considering we were trading at 147 at the beginning of the month. It was always a sell up there as yields just didn't make sense, hindsite is a wonderful thing though as at the time it was just tough to hold on to the trade.
Equities are starting to become a bit more erratic as it seems around these levels we have found value. A big up move is proceeded by a big down move, so it will be interesting what we do from here.
Looking forward, all eyes are on next week as we have the usual raft of data coming out which will tell us we we are, any good numbers might lead to a further sell off in Bonds, and more steepening in the Bond curve as bets on withdrawals of stimulus will intensify.
Either way I shorted everything I could, selling 8s in Sep14Dec14, 7.5s in Dec14Mar15, 8.5 in Mar15Jun15, and 9s in Jun15Sep15. Luckily they all retraced, and in fact I ended up getting out too early as the spreads are looking to fill the gap.
Either way there's alot more action then there has been which is encouraging. Bunds have come off quite a bit trading now at 143.42, considering we were trading at 147 at the beginning of the month. It was always a sell up there as yields just didn't make sense, hindsite is a wonderful thing though as at the time it was just tough to hold on to the trade.
Equities are starting to become a bit more erratic as it seems around these levels we have found value. A big up move is proceeded by a big down move, so it will be interesting what we do from here.
Looking forward, all eyes are on next week as we have the usual raft of data coming out which will tell us we we are, any good numbers might lead to a further sell off in Bonds, and more steepening in the Bond curve as bets on withdrawals of stimulus will intensify.
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