30/08/2013

Another bitty week comes to an end. U.K. voted on more evidence before bombing the bad man in Syria. So early morning take back of Flight To Quality could be on the cards for bunds.....Then again its a friday and shorting them can still be done next week if we're still going for the Sep Taper play. Positive GDP data seemed to be shrugged off after the immediate sell down.

Ten year, nothing to suggest we will open too far from lastnights close. 

Bund, this weeks high in focus 140.95 if we stay above 140.60/65 area for any length of time.

 

€ curves, drifting lower at present in line with long end flight to quality bid although all sitting on a long term support. I'm reluctant to play from a Steepening bias today.

€ teds, the bobl ted is beginning to look heavy. I'll be very wary of being long for any length of time today.

 

In short, its August (still(just)) Its month end, its a Friday and bombing a country is on the agenda. The macro picture tells me to be short bonds, the geo politicital tells me not to be short bonds......These may not be the days that you make your best PnL, but its days like this that earn you your living!

 

Data today - EU Unemployment rate and Consumer confidence of note this am. LTRO's have lost their ability to cause volatility but they're still out today.

 

Good luck

L

 

 

 

 

 

27/08/2013

Good morning all.

Fear of Syria attack certainly having an impact on bonds during yesterdays action. Although the buying appeared to be triggered by very poor Durable Goods initially.
So in short we'll be having a little battle this week between the taper sellers and the middle east conflict buyers. Add to that the fact it's roll over time I think we will have quite an unpredictable remainder to August.
Treasuries don't seem to be much changed from lastnights Eurex close. So the ball is in European hands this morning.

TY

Bunds seemed to stall around 139.93 on a pull back from the up move. I'm looking at this first thing this morning to guide my directional bias.

€ curves behaved as you would expect in this current up move...All except Bobl/Bund spread. Bobls appeared to out perform. I'm going to be extra cautious until roll is complete now.

€ teds, Bobl relative strength has impacted the bobl ted as the up trend appears temporarily broken whilst Schatz ted remains range bound. I would expect the Schatz ted to follow downwards if the Syria situation gets uglier. 

 

 

On the Data front we have IFO to look forward to. Italian Auction may be worth watching too.

 

 

Good luck

L

The Morning After the Night Before

U.S. 10s continued lower after the Eurex close, currently another 10/32s down. So I anticipate a test of the bund low this morning.
U.S 10 year

Bund

Expecting more 2s10s steepening

Teds range bound for now, will they lag the bond direction or will the lack of liquidity mean it comes off harder....Only the "market makers" can decide.

How did the ED$ fair overnight

U.S 10s vs Bunds, as expected U.S leads the way down......This am may see the bund catch up a bit.

 

 

 

Good luck.

L

Minutes

I didn't bother with the open this am, only had bits and pieces on and it being a late show en all.
Regardless of what is said today the markets will be irrational. Therefore putting positions on based on what is released will equal buying hi in spreads or selling low in spreads. So if you're gonna trade the release from an economic point of veiw go home now, read the release, digest and put orders in tomorrow.
I'm not, I'm gonna trade noise and value based on things like ATR, mean reversion and oooh thats moved a long way without any pull back or ooh thats a nice trend with cheap stop on support/resistance.
Call me crazy but thats how I feel comfy with my risk. Keeping the size down and fundamental ignorant bliss!

So I'll be watching this a TED

This 2 year futures

Bond Ultra Bond spread

 A 5 Year TED

Most of it hinges on the price action of this for me

10 year

 

But I will take the opportunity to watch my usual Euro stuff as it gets dragged around by the hedgers. Thin markets expected so I'm gonna be using 25% of a usual clip size.

 

The last 2 days have given a nice opportunity to pick up cheap steepeners in Euro curves. Well 2s10s and 2s5s anyway. 5s10s being its usual "we'll do our own thing thanks" I'm sure it'll be back in line at some point. Either that or the other two are wrong.

€ curves

€ TEDS

 

 

This is the Eurodollar spreads I'm watching

 

All my views on gold, copper, oil,  dollar index, lumber and SnP are purely dinner party waffle and mostly huge uninformed assumptions so I'll leave that to smarty pants.....

Be lucky

L

FTQ

Whoops. Things are not looking positive in Asia at the mo. All equities are under pressure so there is a flight to quality feel to the treasuries.
Nikkei

Mini SnP

 

 

Ten Year

So I expect a bid to the bund from the open. Yesterdays high could be initial target, but I expect Fridays high to be tested pretty soon after. On the downside I only really have yesterdays lo and what I can guess will be the usual psychological 140.00. Assuming we are gonna open well above it.

Bund

 

Looking to put on curve flatteners and maybe hold if we get some momentum.

Teds may see a slight turn around if it continues with bor lagging bond direction. Seemed to have lost some upward drive yesterday anyway.

 

Not much on the data front again today but Gilts could stick a spanner in the works on any upside move with an auction today. Not been a popular choice of instrument to buy of late!!!

 

Just out of interest and to keep it simple, I asked my daughters for their veiw of the bund 60 min chart.

Thea 9(nearly10), Looks like its going down

Evie 7, Looks like it did back there 23&24 of June so I think its going up.

Mae 5. It looks like it stopped going down now. I think up.

To be fair this was at 7pm last night they had no idea of what was going to happen overnight in Asia and I'm not teaching 'em fundamentals so don't be to hard on the pickles.

They will give me their view of the bund technical chart every monday....Stay tuned.

 

Bund 60min chart

 

Good luck

L

 

 

 

19/08/2013

Good morning all,

Looks like weak longs looking for a retrace of the weeks down move where forced to cover in bunds before the weekend. With no major data til wednesdays FOMC minutes, technicals could hold the key. There is a Spanish 10 year auction to consider.

Overnight Treasuries remain heavy so I hold no immediate hope for a bounce this a.m.

€ curves...Still buy dips. Got completely flat friday so may find it hard to get the chance to get back in steepeners. Only stop catching flatteners on the radar at mo...but keeping positions small and tight that way round.

Eu teds continue upwards trend as algos manipulate bid and offer whilst laggiung the speed of bond down move.

 

Good Luck

16/08/2013

New Lower lows yesterday in bonds. Equities also beginning to look a little heavy.
Mini SnP

Bunds

Ten year

I see momentum in Eurex bonds still strong for steepening but wouldn't buy any spreads here.....Especially on a friday. Need to see bunds continue to build a base here and get above 140.28 before I consider putting on any flatteners. So might be a quiet day here for me.
€ Curves

€ teds continue on an upward trend

U.S. ten year continues to outperform Bunds, now at the pre taper talk range low. Is this a good place to sell 10s over bunds? September tapering seems popular veiw but is it priced in. Most of this retrace has come from the unexpected good news from Europe.

 

Light data day, Eurozone CPI and ECB LTRO repayments the main focus.

 

Good Luck

L

 

 

 

14/08/2013

Good morning all,

Bund bricks, what I saw in the bunds yesterday.

More Nikkei strength in the last couple of hours, nothiung on the Ten Year to suggest any short covering in bonds just yet.

Need to pull out to longer time frame to find supports now.

 

Very much in dip buying mode on curves. I imagine a test of yesterdays bond lows before any kind of retracement.

As expected bor spreads flattened.

Ger GDP and UK minutes to look out for today plus German 10 year auction could be interesting.

 

Good luck

L

 

13/08/2013

Good morning all, bunds tested the bottom end of August range yesterday, loitered around 141.95 area for quite some time. Almost had me thinking we might break it, U.S. 10year wasnt interested in following and with no data out for the day back into range we went. Based on the U.S. 10s overnight we could see bunds testing that low again early on.

10 year

bund

€ curves on highs of range, will be tested if bunds do break lows.

 

Cpi's and Zew out this am, so we might see some fireworks, heres hoping.

 

 

Good Luck

L

 

 

 

12/08/2013

Good morning all,

Nothing of note overnight so I expect bunds to open inside the corridor of uncertainty. With no significant data out today we could see one of two things. Either a very boring nothing day, or one that catches us out if we boredom trade! Drift to low or hi then gain real momemtum with stops triggered from a break of last weeks range. So make sure you keep your powder dry. We could be at the mercy of very thin volume and a central banker comment.
Equitity indices continue to power on so I still lean in the bonds off camp, looking for a break below 20 in the 10year and the mid 20s in the bund. Otherwise I will be fading a unit of steepeners around the lo 60s in bund.

Teds continue in slow grind higher due to Euribor strength. Happy to play from both sides of the range, although more defensive on shorts.

 

Be lucky

L