As we are into August, volumes have dropped of a cliff, but data has been coming out strong all over. PMI data has come in strong for all regions as well as factory orders in Germany and so this all points to an improving macro economic picture, which leads us to the question, what will the FED do in the September rate meeting. It is inevitable that Augusts Non Farm Payrolls will have a massive effect on whether or not they will start tapering their Bond buys, and so this report will no doubt bring huge volatility with it, which is good!
Personally I hope they start tapering as this would bring back a lot of volume, and starting making these STIR trades very interesting.
We have been ranging now since the initial move back in June, and its been a matter of picking the ranges. Its been quite difficult because volume has dropped off and its easy to be drawn into shorting too early when it is flat lining, to then be offside, and needing to average.
The main event today is the UK Inflation Report, this hopefully will be a good one as its the first meeting for the new BoE Governor, and hence mite bring about some good opportunities.
The pattern of late has been that Spreads have been dragged up from potential FED tapering, then smacked back down as Europe and UK maintain there still in full accomodative mode. So if something changes in the latter, we could have a new leg higher.
Looking forward there's not much to look forward to as we enter the heart of August, and most big players are away, this is like to lead to more volatility in Equities as it is likely to be much thinner so more easily manipulated. So hopefully September delivers.
Personally I hope they start tapering as this would bring back a lot of volume, and starting making these STIR trades very interesting.
We have been ranging now since the initial move back in June, and its been a matter of picking the ranges. Its been quite difficult because volume has dropped off and its easy to be drawn into shorting too early when it is flat lining, to then be offside, and needing to average.
The main event today is the UK Inflation Report, this hopefully will be a good one as its the first meeting for the new BoE Governor, and hence mite bring about some good opportunities.
The pattern of late has been that Spreads have been dragged up from potential FED tapering, then smacked back down as Europe and UK maintain there still in full accomodative mode. So if something changes in the latter, we could have a new leg higher.
Looking forward there's not much to look forward to as we enter the heart of August, and most big players are away, this is like to lead to more volatility in Equities as it is likely to be much thinner so more easily manipulated. So hopefully September delivers.
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