On the back of strong retail sales last Friday we had strong numbers from the UK labour department today, with the Unemployment rate ticking down to 7.1% just above the 7% target set by the BoE. Cable jumped 100 pips again, and Short Sterling aggressively sold off, being down an average of 12 ticks across the strip.
I chose to focus on the spreads and having been short the front month going into the data, I had no choice but to average in as the Mar15Jun15 spreads pushed up big, moving from 20 to 24. I averaged all the way up and now am averaged at 22 so hoping I get an opportunity to get out. At the same time I was long the Jun16Sep16 Spread at 21, then at 20, now its 19/20, meaning a double whammy of averaging. Not an enjoyable day, but hey at least it moved. Ended up trading over 200 lots of Short Sterling, on that report, so hoping that we get some retracement.
Given this data it is possible the BoE target will be hit next month, however the BoE stated they are in no rush to raise rates, but with strong data all round, the likelihood of a rate rise this year is definitely on the cards, so this the market to watch out for. Below is the move in Dec15 Short Sterling.
Euribor on the other hand, has just been dead in the water relatively, so haven't done much on that as the European economy is totally on a different level to the US and UK, with more talks of easing still in full force.
Else where Stocks continue its yo yo action, as the FED rate decision looms, in another will they taper or ot taper meeting. Pretty mixed data, with most US data coming in strong, but NFP coming in very weak, makes this not clear cut as to what will happen, either way will give some volatility!
I chose to focus on the spreads and having been short the front month going into the data, I had no choice but to average in as the Mar15Jun15 spreads pushed up big, moving from 20 to 24. I averaged all the way up and now am averaged at 22 so hoping I get an opportunity to get out. At the same time I was long the Jun16Sep16 Spread at 21, then at 20, now its 19/20, meaning a double whammy of averaging. Not an enjoyable day, but hey at least it moved. Ended up trading over 200 lots of Short Sterling, on that report, so hoping that we get some retracement.
Given this data it is possible the BoE target will be hit next month, however the BoE stated they are in no rush to raise rates, but with strong data all round, the likelihood of a rate rise this year is definitely on the cards, so this the market to watch out for. Below is the move in Dec15 Short Sterling.
Euribor on the other hand, has just been dead in the water relatively, so haven't done much on that as the European economy is totally on a different level to the US and UK, with more talks of easing still in full force.
Else where Stocks continue its yo yo action, as the FED rate decision looms, in another will they taper or ot taper meeting. Pretty mixed data, with most US data coming in strong, but NFP coming in very weak, makes this not clear cut as to what will happen, either way will give some volatility!
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