Anybody else short US 30 Bond
- Thread starter richard_m
- Start date
Not gonna help...
It's a complicated game being played, but inflation is definitely the big issue that can potentially force hands.
Well, I'm a little bloodied and bruised after the last couple of days, so it's time to time do what every good trader should do...
DOUBLE UP WITH THE SHORT!!
Of course, this is normally folly, I generally advise against it.
But shorting bonds into the likely QE2 announcement, with the questions being, "how big will QE2 be? how much room will the Fed leave for more easing...?"..
..well, experience tells me its best to take the opposite position when a market is talking "how much" not "if"...
And the fact that shorting bonds into the QE2 scares the shit out of me, well that's also usually a good sign.
I just wish that I could get more than two hours sleep a night...
DOUBLE UP WITH THE SHORT!!
Of course, this is normally folly, I generally advise against it.
But shorting bonds into the likely QE2 announcement, with the questions being, "how big will QE2 be? how much room will the Fed leave for more easing...?"..
..well, experience tells me its best to take the opposite position when a market is talking "how much" not "if"...
And the fact that shorting bonds into the QE2 scares the shit out of me, well that's also usually a good sign.
I just wish that I could get more than two hours sleep a night...
That is a dangerous move there.... while you are generally right about being cautious while the market consensus is near 100%, this is a scary case: if the Fed disappoints, it destroys the credibility of the Fed and their new 'communication' channel (that Bernanke championed). Further, the Bernanke the academic has always lectured that BoJ should never been prematurely tightened and stay loosed longer - I don't think he will let his legacy be Inconsistency. That is, I think he'd rather be wrong at the very end than to have history write him down as a man who always preached one thing but when his moment arrived, did the other.
I think 500mm is what the market needs to see to be happy. I don't think it'll be disappointed. But because the consensus is so high, I'm going to stay flat going into the FOMC announcement. Going short outright into it... I hope you are at least short the bond future.
I think 500mm is what the market needs to see to be happy. I don't think it'll be disappointed. But because the consensus is so high, I'm going to stay flat going into the FOMC announcement. Going short outright into it... I hope you are at least short the bond future.
Quote from benwm:
Well, I'm a little bloodied and bruised after the last couple of days, so it's time to time do what every good trader should do...
DOUBLE UP WITH THE SHORT!!
Of course, this is normally folly, I generally advise against it.
But shorting bonds into the likely QE2 announcement, with the questions being, "how big will QE2 be? how much room will the Fed leave for more easing...?"..
..well, experience tells me its best to take the opposite position when a market is talking "how much" not "if"...
And the fact that shorting bonds into the QE2 scares the shit out of me, well that's also usually a good sign.
I just wish that I could get more than two hours sleep a night...
... I'm staying flat into the announcement and going to lift if the announcement comes out as expected or better. Who cares about the first few bps if there's a lot more to run after. I can tell you most (dealer) desks are neutral or long going into this thing (with a few notable, insignificant shorts)
Anyway - think it's a dangerous thing to fade the Fed and the immediate pop. Although (and this is a big although), if the last few bouts of QE announcement here and in JPY are guiding, we should see a sell off in the days after the announcement.
Anyway - think it's a dangerous thing to fade the Fed and the immediate pop. Although (and this is a big although), if the last few bouts of QE announcement here and in JPY are guiding, we should see a sell off in the days after the announcement.
Price will drop when demand disappears. That's pretty obvious. I'm not sure if it's 'artificial' in the sense that this is the whole point of monetary policy. Rates will go higher when things goes back to normal - that's a given - but the question is how long normal will take to materialize.