23/02/2014

Oh what fun we have ahead...Data laden week fills me with optimism for a good volatile finish to February.

Bund  240 min.

Although the steam has run out on the up move since NFP day I struggle to see any of this weeks data surprising to the upside. We could drift lower on account of no more bad news but I'm not comfortable with big steepening bets of any conviction yet. I think its just safer to go range trading til my 30 min charts start to define decent trends.

€ Curves.

€ teds

The lower bands of the upward trend were tested over the later part of last week as the bonds made attempts to climb higher. With resolution to the Ukraine issue appearing to be on hand, Italy's political uncertainty seemingly resolved we saw the wind taken out of them sails. I still see buying dips the way forward here.

TYA

$ Curves

These charts don't really help me get a strong conviction for any direction right now.

Safe trading buddies.

Lee

ECB day

Morning all.

As expected a slow start to the day as we prepare for the ECB rate anouncement and Draghi speech.
A test of 143.85 in the bunds this morning looks on the cards but I'm keeping myself out of any directional bias in the am. The continuation of softening inflation data out of Europe increased the chances of a rate cut today, but as it drew closer there is a sense that Draghi will hold off. We could be in for a real volatility treat short term when Sterilization starts to be mentioned along with rates corridors. Plenty of things just around the corner that could set off severe discomfort in the Euro area over the coming months. So its probably wise that Draghi and his merry band continue to remind us they have the tools. This should hopefully steady nerves and prevent any full scale periph bashing to add to EM woes.

Bunds 30 min.

Bund daily, thats quite a trend.

 

 

Cme futures EurUsd Mar. 30min

Stoxx. 30min

 

Something I use as a pretty decent leading indicator for my Teds, Btp Bund spread.

Teds

€curves, I'm getting the first sign of a buy opportunity in curve trades just now. Obviously I'll wait and see what happens this afternoon. The spreads of all crawled over my 60 and 20 moving average. So I have a cheap stop on the short term timeframe. Long term however, I sense it would be foolish to look for any significant rally just now.

 

Bor Spreads

 

Good luck

L

 

 



05022014

 

 

Bunds, we have opened in the middle of this weeks range. Steam seems to have run out a little on the FTQ bund bid just now. With ADP today, ECB rates tomorrow and NFP on Friday its understandable that  buyers would like to take some profit. Lighten the load with some influential moments to come.

 

Emerging market fears although not abated entirely, sentiment is starting to settle and get some perspective. After the exciting "We're all doomed" of January.

Dax 30min chart.

 

Cme EUR fx futures

Tya

 

Curves

Will the ECB cut rates this week, will there be new special measures. Unsterilised measures? Who really knows?

Not much wiggle room just now, spreads continue to flatten  as we feel the impact of US taper. I'm flat right now and will need a pullback to 143.50 before I consider putting on any flatteners. Putting on steepeners would only be short term and depending on the speed of an up move thru bund highs.

Currently 5s10s offers the most opportunity.

 

€teds

I continue to sell rallies in teds going with the longer term view. However, the Schatz teds ( i often use as leading indicator for bob teds) Is beginning to look like its turning. I always feel it foolish to have too many on pre ECB rates. So treading lightly til then.

 

 

Eur retail sales and Bobl auction to look forward to.

Have fun

Lee

 

Maybe there are other reasons for my below par performance!

Yeah I'm dipping my big toe into oil spreads.

This'll be fun!


Brent Crude

WTI

 

 

Gas

 

Lee

Month end. Time for Perspective.

 

 

To coin a sporting phrase the Championship is never won in January (Unless you're a tennis fan) but it can sure be lost! So its important to build a solid foundation in the first month of the year & grow in confidence from then on. Many things happen over this period. Fresh enthusiasm can lead to trigger happy investors forgetting about value & timing.  For example...I've never been more prepared for a year than this     And so bloody wrong. I guess thats why I'm who I am and why Bill Gross is Pimco!

See I was blinded by the whole Taper thing and the great Bond bubble. Watching the Treasuries rally in the first week of Jan excited me no end. I couldn't wait to get back from holiday and start putting on steepeners.

I do remember reading articles last summer by Jesse @TheBubbleBubble(Enjoying his finest hour right now) about the impact of reduction in QE on emerging market currencies. I bored my wife about it and everyone else who cared to listen(or pretend...sorry mum). Especially the people singing the praises of the great british recovery. Yet I still ignore it and started putting on the old "risk on" trades. Its a testament to my risk, money & me managment skills that with a day and a half left of the month I'm gonna actually finish up PnL. 

 

Its clear to see that the Emerging markets are this years Cyprus/Greece/Euro/USbanking Gray Swan event. Yes its grey not black. Black Swan events are the unpredictable ones far less frequent than grey and almost impossible to anticipate. Most of the recent events as bad as their impact was or is, could've been predicted and prevented but for the frail human emotions of fear & greed.

So we're all EM traders now. Bring on the Hungarian Florint! I might even start looking at my old favorite the Malaysian Ringgit!

 

Who Am I trying to kid? This year as with all years, I will fade the bad news then fade the good news. I've learnt my lesson trying to trade with the theme.

 

That peskey Bund keeps making new highs which means I need to look at my Daily continuation chart to find resistences to the momentum.

Anecdotally there is has been congestion around this 143.05 to 143.30 area. So whilst all news has been factored in for now this appears a nice place to rest - around my 0.618fib area. Above here we have 143.44 to 85. On the downside 142.90 break could see some longs reducing into month end but I'd be suprised if we see a break below 142.50. 

 

 

Bund Daily Continuation

 

 

bund 30min

 

 

€ curve

Trend is your friend. Well this late in the month I wont be selling any of these spreads till they are much higher. That is however, where I see the opportunities for the coming months. Sell the spread rallies. With one eye on EM currencies & equity indices for the change in big picture sentiment.

 

€ Teds

Refreshingly range bound during this current crisis period. I'm sure it wont be long till Europes banks strange fixings & LTRO conditions take precedent. Last year  we saw the long slow up move in Euribor over bonds as the overall trend. Quite clearly that has been turned over. Likely to find shorting rallies as best risk reward until further notice.

 

 

 

Euribor spreads

Eurodollar Spreads

 

Laters

Lee

 

 

 

28/01/2014

Well hello.

Bund 30 min, 3 to 4 day consolidation period in full swing. Ties up nicely with tomorrow nights FOMC. We are currently sitting in the middle of range although short term momentum has turned slightly bearish.

 Bund 240min

TYA 30min

 

Turkish Central bank announced am emergency meeting for midnight tonight. This took the wind out of the FTQ bund bid pretty much instantly yesterday.....We were looking a bit lethargic in our assent and with FOMC likely to do a further $10bln taper tomorrow night this seemed a decent time for taking profit (NOT IN MY CASE(pretty much avoided that position this year so far!)).

With this up move stalling the curve spreads in € bonds are showing signs of minor correction. Could possibly dip toe in here, certainly an obvious cheap stop to be had.

€curve

$curve

These are very mid range, sit on hands for me.

 

 

€Teds

Reflecting the directional sentiment of bunds....Small rest from the weakening bor over bond spread.

 

 

Eyes on UK GDP today.

Gilts

 

Good luck

Lee

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

16/01/2014

Good morning all,

Better than expected Empire manufacturing & an impressive performance from the European equity indices saw bonds make new lows on the week yesterday.
The shortend still a touch weak keeping pace with 10s in the down move. Higher fix than expected yesterday, banks are paying back larger quantities  of the LTRO so we are witnessing a draining of the excess liquidity. This is weighing heavily on the Short end. It was the 17th of Jan last year that witnessed quite a huge sell off in Euribor from a similar concern. Mustn't fear! ECB members are not shy in reminding us that they have tools at their disposal to ensure we do not get an explosion of short rates. Problem is, if they come in the form of new a LTRO/MRO type thing the conditions for acceptance may be too prohibitive for those that need it.

Well a data splattered Thursday and with my waters muddied, I'm maintaining a small and changeable approach to the markets again....Probably for the rest of the month TBH.

tya

I expect the Bunds to come in largely unchanged from last nights close. Lower high & lower low puts the momentum to the downside although we did have a nice bounce from the 37/40 level back into mid range. Which only goes to serve my lack of any real directional certainty.

 

 

€ curve still bumbling along the bottom of its range despite the small turn down in tens. Mainly thanks to the stuff highlighted above I think. No fireworks from the Bobl auction.

 

 

 

Good luck

Lee