Getting into treasury bonds-notes futures (US/EU)

[FTDK]

I am looking to add government bonds and yields to my trading instruments and i am looking for some more information on what to know and what to look for.

1. Is it important to keep an eye on the yields intraday or is it enough to keep a long term eye on the yields just to know what they are doing? Or is there no point in looking at the yields at all since it should be a reversed chart from the futures?

2. Are the futures an exact copy of the movement of the yields (reversed)? At first glance it looks like there are small differences but that could be because of different data providers/not quality data yet.

3. I understand the US bonds and notes trade almost 24hrs just like index futures markets, but the open outcry hours are 8:20 am EST to 3 pm EST? However yield charts have no overnight hours. How do most professional traders approach this market? Do they trade based on the instrument chart (ZN, ZB) or do they trade based on the yield charts (TNX, TYX)? Are overnight levels significant or are only the open outcry hours/levels the important ones?

European bonds/notes don't trade overnight so these question don't really apply to those markets.

Are there any other significant points i should take into account for both the US or EU bond/notes markets? It will be my first time trading EUREX products so i still have some research to do, any feedback is appreciated.

 

[bone]

1. If you move this thread over to the fixed income forum, you're bound to get more feedback.

2. Eurex Schatz, Bobl, and Bund trades from 01:10-22:00 CET so your information is wrong there.

3. ICE Euribor trades from 1:00 am until 9:00 pm London time so that trades 20 hours per day.

4. CME STIRS and the CBOT 2s, 5s, 10s, 30s, Ultras trade 23 hours per day.

4. Exactly what hours will you be trading (US time)? I would be able to answer you better with that information. Will you be scalping or longer term trading? Outrights or spreads?

 

[FTDK]

2. Eurex Schatz, Bobl, and Bund trades from 01:10-22:00 CET so your information is wrong there

I just noticed that as well, but it seems like most of the volume trades between 9 am CET and 5:30 pm CET. The same goes for the other EU products you mentioned.

4. Exactly what hours will you be trading (US time)? I would be able to answer you better with that information. Will you be scalping or longer term trading? Outrights or spreads?

I am locatedin the EU so i can trade both the EU session and the US session.


In my equity index strategy my main levels are the overnight levels, so i am trying to figure out if the overnight levels also have some level of importance in the US bonds/notes and EU bonds/notes.

My main strategy is intraday trading, mostly outrights, it is for this strategy that i am looking for more detailed information, mainly since i want to figure out if i can expand my current trading strategy to products like these.

I have a second account that i use for longer term positions both outright and spreads.

So it seems that for ZN/ZB i need to chart from 8:20 am EST to 3 pm EST for the open outcry session, everything else is considered overnight, correct?

For EU products it seems to be 9 am CET to 5:30 pm CET.

I guess the main question i have is how do professional traders approach these markets, do they watch overnight levels or do they only care about the session trading hours (the ones i mentioned just above). Do they chart the extended hours, or only the main sessions.

 

[bone]

There hasn’t been a meaningful open outcry session in US Treasuries in over 21 years. The pit has been gone for decades.

Concern yourself with prime New York and London time zone trading hours. In the case of the U.S markets - from about 8:30-ish am Eastern until about 12:00-ish pm Eastern. These are the times that the Banks, the Commercials, the Dealers, the Hedge Fund Desks are getting the majority of their work done.

I traded US and European interest rates extensively from the late '90's until 2005. Especially Eurex and Liffe. The ECB and the Bundesbank leak economic releases and numbers to the big EU banks so don’t even bother with the ZEW Index anymore - the only traders surprised by economic releases in Europe are the little guys. The German banks especially are notorious for being incredibly well positioned prior to "public" economic releases.

Model the data and decide for yourself - some people scalp and others spread trade. Eurex drove out the independent traders about 18 years ago by allowing some really reprehensible and manipulative behavior by the banks at the grave expense of market makers and speculators, and sadly that market has never been the same since in the opinions of many.