Tuesday, 29 April 2014

Choppy Trade as Market Looks for Direction

So I have been away for the past couple of weeks, but having come back yesterday, it seems nothing has really changed, Euribor Spreads are trading roughly the same levels as they were a couple of weeks ago, maybe a bit higher, Bunds solidly over 144, and Stocks are having some whippy price action but with the bulls seeming to win the battle as always.

Yesterday there was an initial rally in Euribor Spreads which given the way they have been smacked back down every time they rally, I decided to short. I went Short 5s in Jun15Sep15, got some 6s and 6.5s in Sep15Dec15 and 8s in Dec15Mar16. I managed to get this pretty early as some of the German CPIs gave an offered tone to the Bonds. It was your normal wait but the Spreads all came down as expected and gave good for 1/2 a tick.
The price action was better then earlier in the month so hopefully this is a sign of some improvement.
Looking ahead we have FED rate decision tonight, so although it will most likely be you $10Bln taper its unlikely there wil be any other significant news but you never know so will be ready for anything. Lastly Friday we have NFP which is always a biggie. Hopefully some good opps over the next few days.

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