Tuesday, December 19, 2006

Well at least I can trade rates ok...covering Bund and Gilt short

Bought back my £30/tick Bund short at 116.86 (that's the March Bund future) and bought back the £10/tick short in Gilts at 108.22 (again the March contract). Still think that long-term rates are heading much higher from here (February rate rise in the UK looks a done thing, so short rates at 5.25% and looking like they are going up means 10y yields will struggle to stay as low as 4.70%, which is about where they are just now), but I've made £5,000 on the combined position since putting it on last month, and that was without having the full position I wanted on. So we'll take that and look for another entry point.
 
Bund market having a really tough time the last 2 weeks, down about 2 points from the highs, and feels like it's trading very poorly, but we may see a little support around these levels (~3.85% on 10y Bunds) for a little while.

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