The action in the STIR space has been a snooze fest to say the least. I started getting short spreads mid October, admittedly at what was in hind site pretty bad prices. Over the next couple of weeks Sep15Dec15 pushed up from a low of 9 to printing 19s, and I was naturally shorting all the way up, but the action was so slow that it was probably the most tedious trade I have ever been in. For the next 2 weeks and coming into the first week of November, prices grinded higher, and all I could do was try to improve basis, as the Spread then topped around 18s, Finally a week later, 3.5 weeks after getting into the trade, the curve flattened and my over riding feeling was just to get out as I was so fed up holding for so long, and so I got out at 17s and a few at 16s, having been short from 14s up to 18s. Now the Sep15Dec15 trades at 14/15. Had I managed to hold would have been a great trade but although I had the patience to hold for a month, a week more and would have made the whole trade worth it.
The take away from this is that this type of trade a few months ago would have lasted a few days, or a week, but to day trade these markets now is pretty much impossible, and by the looks of it rate hikes seem to be pushed back further on the back of falling inflation, which is not likely to help the day trading action in STIRs.
On the Equity front, its like Ground Hog day every day, we have a bit of early weakness and then the buy the dippers, (who now buy on 2 tick dips) push everything back up, and this is purely funds trying to generate performance as many are under invested. So regardless of news, fundamentals or anything else, the word is Buy. In the past this kind of cheap money fueled rally has nasty consequences, so lets see how much they will push this up before rationality sets in.
The take away from this is that this type of trade a few months ago would have lasted a few days, or a week, but to day trade these markets now is pretty much impossible, and by the looks of it rate hikes seem to be pushed back further on the back of falling inflation, which is not likely to help the day trading action in STIRs.
On the Equity front, its like Ground Hog day every day, we have a bit of early weakness and then the buy the dippers, (who now buy on 2 tick dips) push everything back up, and this is purely funds trying to generate performance as many are under invested. So regardless of news, fundamentals or anything else, the word is Buy. In the past this kind of cheap money fueled rally has nasty consequences, so lets see how much they will push this up before rationality sets in.
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