P+L update, current thoughts and some trades I forgot to post the other week:

First off, admin...here's the details of 2 trades from March 30th I did.

1) Quickly turned £10 of my Jun '06 Treasury short, having sold it at
107.44 a couple of days previously, I bought it back at 106.32 on March
30th. Clearly I should have waited since bonds have tanked even further!
But couldn't resist taking the P+L, over £1100, and still have another
£10 of the trade on. Plus it gave me room to sell £60/cent of the 5y
Future.

2) Also on March 30th, I sold back my £5/cent long in EURGBP @ 69.69, as
the position was really too small...if I'm going to be involved in a
trade, it has to be proper size, and I have my main GBP FX risk in the
short GBPUSD position. Pocketed a huge £185!

P+L Year-To-Date is £9,200...am a little surprised some of the equity
longs haven't performed better...the main P+L has come from being short
Treasuries (£5000) and from being short GBP versus USD (£4800).

Am feeling good about most of the current positions, as I think Treasury
yields keep rising as economic growth in the US continues to power
along, and it will take quite a while for the FED to reduce the money
supply it created from an extended period of too low interest rates. On
the back of that, and combined with a slowing UK economy and hence rates
in the UK going nowhere or even down a bit, I am very confident on
GBPUSD (Cable) dropping significantly from current levels, as
interest-rate differentials is still a major driver of FX rates.

Away from that, I'm getting a little nervous of risky assets. Central
banks withdrawing liquidity while markets are at multi-year extremes
(flat interest-rate curves, tight credit markets, high equity earnings,
though not high P/E ratios so I keep reading) is asking for trouble, and
the bear market could be around the corner. It's just hard to tell if
that corner is weeks, months or years away. Given I think that corporate
earnings are at unsustainable levels due to increasing global
competition, transparency in pricing thanks to the internet, and a
consumer who is increasingly indebted, stocks look like they could be in
for a sustainable fall in the future. Am keeping this in mind as regards
my long equity trades, since I have a total equity long of about
£165,000 equivalent, so significant market exposure. I may short some
indices, probably the S&P500, against this. Need to do about £120/point
of the S&P500 to neutralise market risk, will think about legging this
around. Or if you prefer the fund manager bullshit-speak, I'll be
hedging my beta and trading the alpha of this portfolio around.

Other markets I have an eye on is Oil which will be worth shorting at
some point, it is way over-talked that there is not enough supply, OPEC
seem to be unwilling to make any supply cuts with prices this high, so
I'd expect prices to move down from current levels in the medium-term.
Also Short Sterling, the strip is pricing in UK rates not moving or even
going up 25bps at some point over the next couple of years, whereas it
seems to me that economic risks are to the downside, and once the City
bonus season has stopped supporting the housing market, we could see
that come down a touch and get some rate cuts priced into the curve.