Its been a quiet week in the STIR space to put it kindly, but with this massive beat in UK retail sales we had a very nice move down in Short Sterling, and a 100 pip move up in Cable. I didn't catch the move down in Short sterling outright, but I used the down move as an opportunity to get out the long Spreads I had been holding for four days and initiate more shorts on the move up, as it reached the top of the range. I had mainly focused on Shorting the Mar15Jun15 Spread at 20s, where I was able to short a few, and then used the inevitable fade to get out at 19s, so worked out nice.
The big beat puts the likelihood of the UK acting first in terms of rates a more real possibility, and so it is likely that these Spreads will remain at these levels if not edge higher providing data continues to come in strong.
On a separate note, below is a chart of Short Sterling and Cable:
You can see in Cable a 30 tick move up in the 25 minutes before the data was due, something tells me, as usual someone had the number, as always. I was tempted to go long into it on the back of it, but backed out unfortunately.
Despite this Short Sterling Spreads have reverted back to levels prior to the data, so looking for an opportunity to go long again.
The big beat puts the likelihood of the UK acting first in terms of rates a more real possibility, and so it is likely that these Spreads will remain at these levels if not edge higher providing data continues to come in strong.
On a separate note, below is a chart of Short Sterling and Cable:
You can see in Cable a 30 tick move up in the 25 minutes before the data was due, something tells me, as usual someone had the number, as always. I was tempted to go long into it on the back of it, but backed out unfortunately.
Despite this Short Sterling Spreads have reverted back to levels prior to the data, so looking for an opportunity to go long again.
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