As US bond yields continue to plummet, US bond yield spreads have widened as markets continue to factor in more rate cuts from the FED, following on from the 50bp 'Emergency cut', during the week.
With Eurodollar spreads sitting at lows for many weeks, the only play was long there, and so the rise in spreads has been nice as we now approach the upper end of the recent range, looking for shorting opportunities around these levels for Dec21/Mar22 through to Dec 22.
The DOW/S&P spread has been a good play of late, has not been as skewed by the tech names like the Nasdaq. The spred ranged in a 100 point range, inside the larger range, and scalping 25 ticks at a time, around 4040 long and 4170-4200 short has been my play today, which has worked so far as the spread has remained fairly steady on this broad based sell off.
In this tricky environment, keeping it small, and quick to cut the break out.
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