Bunds trading 146.17 as I write, didn't think I would see that level in a long time, but it seems that negative interest rates in the EU is a given now. The Yield curve has experienced some aggressive flattening, which is proving very difficult to trade.
Stupidly enough I've started to buy these Euribor Spreads, thinking that the Red and Green months spreads have already been hammered quite a bit were a bit over done so maybe we mite get a bounce, but this hasn't been the case, its literally been a one sided market, not a tick retrace to report, so at the moment quite underwater on my positions, but I've played it relatively small so hoping for some pullback. I'm long Jun16Sep16 at an average price of 8.5s and Mar16Jun16, at a price of 6.5, looking to put more on as it continues to go lower.
Below is the chart of of the Jun16Sep16 Euribor Spread, where we see a straight line down pretty much in the past week.
Not a pretty chart for a spread trader at all, but hoping we get some stabilization soon.
Short Sterling on the other hand has been pretty flat, with yesterdays inflation report signalling that rate rises will be gradual and there isn't any real hurry at the moment. The UK is at a totally different point to the EU, where rates are going in opposite directions, which makes you wonder what would have happened had the UK adopted the Euro.
Not much more data out this week so hoping for some stabilization soon!
Stupidly enough I've started to buy these Euribor Spreads, thinking that the Red and Green months spreads have already been hammered quite a bit were a bit over done so maybe we mite get a bounce, but this hasn't been the case, its literally been a one sided market, not a tick retrace to report, so at the moment quite underwater on my positions, but I've played it relatively small so hoping for some pullback. I'm long Jun16Sep16 at an average price of 8.5s and Mar16Jun16, at a price of 6.5, looking to put more on as it continues to go lower.
Below is the chart of of the Jun16Sep16 Euribor Spread, where we see a straight line down pretty much in the past week.
Not a pretty chart for a spread trader at all, but hoping we get some stabilization soon.
Short Sterling on the other hand has been pretty flat, with yesterdays inflation report signalling that rate rises will be gradual and there isn't any real hurry at the moment. The UK is at a totally different point to the EU, where rates are going in opposite directions, which makes you wonder what would have happened had the UK adopted the Euro.
Not much more data out this week so hoping for some stabilization soon!
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