So we hit a new high in the ES and Dow Futures yesterday, which saw a rally of 8.5% since the end of June. At the same time we have seen the Bund rally close to 500 ticks, as we are now in the 144s again. This is a case where taking advantage of an overreaction from the market worked out nice. Pimco the World largest Bond fund were saying they would be buying up 10 Year on the move down cause its an overreaction, and it worked out nice for them. Personally I didn't buy the Bund even though I was contemplating buy the 142 Bund Calls as I wrote earlier on the 24 th June. Sadly for me I never ended up buying them as the Option was too expensive, but in hind site it would have been a great trade :(
Either way in terms of STIR spread activity we have seen a massive fade from the push up, especially nearer the front end, which is what you would expect, and with comments from BoE and ECB stating that easing is here to stay for now, and if anything negative rates could be looked into in the case of the ECB shifted my stance to shorting any up move in the Spreads, and so far that has worked out. The Sep14Dec14 Spread have moved down from 8.5s down to 4.5s now, as we are moving back to pre FED levels, but at this stage I would be looking more at longs then shorts, as I think we getting to the bottom of the range in these Spreads, and they also held pretty well last time out.
All these central banks are saying data will be the key in terms of future policy, so its good to keep an eye out for the data coming out. Yesterday the good philly Fed number was the catalyst for the move up in Stocks, but after market we had the report that Detroit has filled for bankruptcy, as well as Google and Microsoft disappointing on earnings.
Looking forward, ill be looking at a long bias in the Spreads as they continue to come off from their highs, but at the same time volume has totally dried up as summer season is well and truely among us. Its about jus chalking up what ever profit you can from these slow markets and not pushing it too much when nothing is happening. Key data is the catalyst in this market and there's not much out till Tuesday as we get the flash PMIs out of Europe.
The Bund is up at 144.36 as I write, and it doesn't look like there's much in the way. But I think Buying the Spreads are the way to go, but I will be playing it with much smaller size as volume and general action is pretty low, which isn't the best conditions to day trade.
Either way in terms of STIR spread activity we have seen a massive fade from the push up, especially nearer the front end, which is what you would expect, and with comments from BoE and ECB stating that easing is here to stay for now, and if anything negative rates could be looked into in the case of the ECB shifted my stance to shorting any up move in the Spreads, and so far that has worked out. The Sep14Dec14 Spread have moved down from 8.5s down to 4.5s now, as we are moving back to pre FED levels, but at this stage I would be looking more at longs then shorts, as I think we getting to the bottom of the range in these Spreads, and they also held pretty well last time out.
All these central banks are saying data will be the key in terms of future policy, so its good to keep an eye out for the data coming out. Yesterday the good philly Fed number was the catalyst for the move up in Stocks, but after market we had the report that Detroit has filled for bankruptcy, as well as Google and Microsoft disappointing on earnings.
Looking forward, ill be looking at a long bias in the Spreads as they continue to come off from their highs, but at the same time volume has totally dried up as summer season is well and truely among us. Its about jus chalking up what ever profit you can from these slow markets and not pushing it too much when nothing is happening. Key data is the catalyst in this market and there's not much out till Tuesday as we get the flash PMIs out of Europe.
The Bund is up at 144.36 as I write, and it doesn't look like there's much in the way. But I think Buying the Spreads are the way to go, but I will be playing it with much smaller size as volume and general action is pretty low, which isn't the best conditions to day trade.
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