what market?
Futures Options on GBP/USD
- Thread starter hhiusa
- Start date
UST spreads, for instance, especially the long end... Longer dated x-ccy basis moved as well, especially the USDJPY forwards, so beloved by punters.
How do you think the market participants decide that they should put a position there? Do they actually read 140+ pages or trade off a headline? FT said it wasn't likely to pass the congress. Why hasn't it been whole banking sector positive (JPM, GS, MS, BAC, C didn't perform that strong yesterday)?
Banks performed a bit, to be fair (BKX index opened arnd 1.2% higher)... Maybe it was offset a bit by the uncertainty arnd rates, who knows.
As to how the mkt participants decide to trade, I'd guess it depends. In this particular case, there isn't much else to do at the moment, especially with the summer here. This means that people are desperate to find carry trades. All the trades that moved yesterday offer good, "safe" carry. That's why, I guess, people were very happy to trade off a headline. As to the idea that the measures won't pass Congress, this may be the case, but some of the things mentioned in the Treasury report wouldn't require Congress to sign off. So maybe that's another factor... All these are just my idle theories, though.
Well they did alright today. GS especially. Entered 1417C222.5 5.70 underlying @222 after it dropped from 224.00
Banking - Correction likely tomorrow.
What about interest rate differentials between countries. I heard swap rate is based on this+libor rate which is also publicly available. But I talked to Hotforex support they said they apply some minor modifications to the calculation to eliminate arbitrage opportunity.