Known Unknowns

No looking at the markets, charts or news. Not even gym. Just eating, drinking and playing games with the kids for 2 weeks.
So I'm just gonna waffle on about a few things that will shape my trading eye for Q1 2015.

Decisive outcomes.....Good or Bad are met with relief in the trading world. Its the bit in the middle that we don't like.
Grexit
So 2015 kicks off with a Greek election that has seen the resurrection of the "Grexit" term. Syriza do as they promise if they get in and Draghi wont have to worry so much about full QE questions for a while....Other "periph" nations of Europe will also consider to vote for populist anti ECB.
Spain takes to the polls later in the year and the outcome of the Greek election could be an influence.

QE or not QE
Draghi can keep waxing lyrical about structural reforms or how we need to wait for the effects of TLTRO to filter through. Other governmental uncertainties aside every rate meeting will be dominated by how and when the ECB buy sovereign debt.

Russian Soldiers holidaying in The Ukraine.
No sign of  Putin bowing to the west and changing his stance on this subject. Sanctions on the nation add to that a very weak Oil price. Will a Russian debt default impact on the global markets? The situation has only added extra pressure to Europe and its attempts to stave off stagnation.

SNB & defending the Franc floor. (Pissing in the wind). All ECB action to inject economic growth in Euro nations only adds to the flight of money into Swiss Francs. Interesting tug of war that cannot be resolved whilst Europe is in such a mess.

UK general election and rate rises.
The first rate rise could trigger a number of pessimistic outcomes. Self fulfilling prophecy how fast and how steep. Better put the house on the market dear our mortgage just went up £300 a month. Its a delicate balancing act for Carney and co. Economy is good, rates cant stay down here. Doh! Economy only looks good coz rates are down here.

US rate rises
Stronger dollar impacts everyone else. We saw at the beginning of 2014 emerging markets hurting from a significant adverse move vs USD. Weaker USD denominated commodities helps soften the blow. A global economic struggle will impact on the US so the gentle approach to rate rises considered. Long end bonds will still be attractive Flight To Quality so T-bonds and Ultras rates wont go too high with all the Geo politics and Europe shenanigans.

Abenomics
Doing the same thing over and over again and expecting different results......It can be argued that external situations and events prevented Japan from ever recovering from 25 years of mess. (Makes me fear for Europe even more).


Market Dynamics
ECB ZIRP lower forever. No  participants in Euribor outside of "market makers"," now you see us now you don't". Schatz and Bobl at 0% you'll struggle to see much 2 way flow there. May see value in trading peripheral ecb bonds versus bund.
US stir markets will be where the action will be this year(I think).


That'll do for now. I'm off to look at charts now. May post them ideas tomorrow.

Night night
L

Black Friday

TY 240min
What a very neat chart.

TY 30min bar chart

 

Bund 240min

Bund 30min

 

 

 

Schatz 240min

 

Whilst the Bund continues its slow climb up the wall of worry Schatz remains heavy. With very little reason for short end to move higher Curve trade ideas are simple. Put on flatteners at every slight pull back, it could be argued that just buying bunds is the same thing........But it does seem like there could be extra mileage in selling Schatz.  Something to watch out for over the thin December markets is erratic stop execution. Occasionally you get ridiculous moves so I'll be keeping an eye on this trade for 2 reasons. Gap up bunds extensions and or large Schatz sell stop orders triggered. Not saying they will happen.

 

 

Having said all that, Bund does seem a tad exhausted on the upside just now and could do with a little consolidation before pushing on. Geopolitics aside pre ECB meet week seems as good a time as any for that rest.

 

€ curve

 

 

 

 

24/11/2014

TYA 240min

30min

Plenty of data out this week, Chinese rate cuts and Draghi talking even more dovish(if thats possible) so I anticipate plenty to risk to being short bonds.

Bund 240min

bund 30min

€ curve

Continuing to flatten, even during last Wednesdays Bund sell off, to be fair there is very little the Schatz and Bobl can do to the upside.

BTP-Bund spread continuing to push upwards despite higher Bund prices....Draghi comments are filling the periph with anticipation of full retard QE. I don't see any new measures this year, we'll have to wait till we see the take up of the Dec TLTRO before real talk of next step can be considered. We still have the prospect of dropping the first "T" before outright sovereign purchases.

Good luck

L



20/11/2014

US 10year future

240min

30min

$ curve

S&P Daily

 

 

FOMC minutes over with, Nothing Shocking. Head into year end Equities dressed up as hi as poss, put Geopolitics on the back burner and play the range in treasuries.

 

 

Bund 240min

 

 

bund 30min 

 

Up trend we have seen since end of October appears to have been broken. As with US tys, balanced into year end. Happy to play from either direction.......Maybe tighter stops on short positions tho.

 

 

BTPBund spread 30min

 

Stoxx 240min

 

Plenty of room to the upside in Stoox.......I guess we wait for next years full blown QE.

 

EU Pmi's, UK Retail Sales, Spanish Bond auctions and US CPI among the usual Thursday fare.

Be lucky

L

 

 

 

18/11/2014

TY 240min

30min

bund 240min

30min

Despite yesterdays all day drift lower the uptrend still in place. Zew out today along with UK cpi, so plenty of stuff to influence this morning before US day begins.

13/11/2014

Turn around Tuesday witnessed a minor drift upwards lacking any conviction. So we sit in the middle of range in US treasuries. One eye looking at the downside trend continuation and one eye on whats going on in Ukraine.

US 10 year futures 240 min

US 10 yr 30min

Bund continued to climb higher ensuring the uptrend is still alive and well despite the late drift off into close. This mornings open has seen an early test of yesterdays low, I'm looking for decent support into 151.20 area to maintain a bullish short term bias.

Bund 240min

 

 

I just think the Bund wont be satisfied until it has reached the October 15th Summit.


Bund 30 min

Usual Thursday data from the US, otherwise be on guard for Russian holiday commentary.

Be lucky

L

11-11-2014

Bund 240 min

Bund 30 min

Upward trend intact, room for downside correction a possibility. Thursday ECB low of 150.77 will be a good support area to watch for, especially after Friday 150.78 low print was rejected so aggressively. Little on the data front plus Veterans Day so wise to steer clear of mid range trading today.

US ten year 240min

US ten year 30min

Monday saw a brief weak follow through from Fridays buying. This broke the down trend that was in place since US retail sales spike. My money would be a continuation of down trend but we are in a corridor of uncertainty and feel safer to sit out til a break of either 125.235 downside or 127.00 upside for confirmation.


Good Luck
L