Why no fixed income? Treasury, MBS, CDS, etc.
- Thread starter kmiklas
- Start date
No, I think that a fixed income forum in ET makes sense.
We're talking about US Treasury instruments here: bills, notes, bonds, etc. Notwithstanding S&P's downgrade of the US from AAA to AA+, I still think that they're worth talking about.
Then there's the mortgage markets: MBS. Arguably the 2nd biggest market in the US, behind the aforementioned Treasury market.
Furthermore, there ABS, CDO, Repo trades. Commercial bonds, Munis, CDS, commercial paper, junk bonds, repo trading, Eurobonds, China bonds, Kimchi bonds... there's a lot to talk about!!!
We're talking about US Treasury instruments here: bills, notes, bonds, etc. Notwithstanding S&P's downgrade of the US from AAA to AA+, I still think that they're worth talking about.
Then there's the mortgage markets: MBS. Arguably the 2nd biggest market in the US, behind the aforementioned Treasury market.
Furthermore, there ABS, CDO, Repo trades. Commercial bonds, Munis, CDS, commercial paper, junk bonds, repo trading, Eurobonds, China bonds, Kimchi bonds... there's a lot to talk about!!!
Most of that sector discussion takes place in the financial futures forum. It used to be fairly active in the early 2000's (the Eurex and Chicago prop group heydays). It's tough finding traders well versed in yield curve minutiae and "clean" versus "dirty" fixed income futures pricing. And quite frankly the fixed income futures scalpers tend not to be steeped in the deep dive complexities. It's a hell of a rabbit hole - equities and commodities are much easier. Most of the really good fixed income traders are on bank desks, HF's and a few big prop firms and they don't post here. It would be awkward silence...
1,763 pages in the bible for the rabbit hole:
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I've got some clients who scalp Bunds during European hours and 10's or 30's during US hours. They're watching the fixed income news feeds, BrokerTec and Cantor cash markets, Oil, Gold, the Dollar Index, the Euro, and the major stock market indices.
True it is a huge market but it is not a traded market. Most of those securities are privately placed with hedge funds, pension plans or large investment banks. You are not going to get retail traders working MBS trades, those move in millions to institutional houses. as for Tbills et al, again, not much discussion can be generated because no one is trading them here. I dont see any commercial paper trading hands at the retail level.
Thos are really outside the scope of this forum.
True, on pretty much all points, but you missed one important thing: the fixed income market affects price movements in the retail-accessible markets. An understanding thereof tremendously improves trading ability.
Lurking in the back of many price movements are fixed income instruments. Recall back in January 2018 when the 10Y T-Note broke 3%, and there was a market downturn. Why? Put yourself in the shoes of a fund manager. Would you take a relatively risky position in the market--even with an AA rated company--when you can have an essentially risk-free 3% cash flow, with compounded interest!? Think of what's happening with General Electric (NYSE:GE). They're borderline junk now! I'm sure that many fund managers are thinking about how they would have been happy with a TIPS bond in place of a position in GE.
It's important to see the market as a whole, and fixed income is a big part of that whole. I agree that we can't _trade_ it, but we must _understand_ it. Fixed income cannot be ignored... and has a place on ET.
I am not saying it should be ignored, it just won't find a big audience here.
My advice is start threads related to it in ECONOMICS or FINANCIAL FUTURES which covers all of that.
My advice is start threads related to it in ECONOMICS or FINANCIAL FUTURES which covers all of that.
With @Martinghoul gone, there is literally nobody to provide expert opinion on the topic.