Wednesday, 10 July 2013

Markets post Bernanke

Well we've seen a rather interesting shift in stance from the Fed. In my opinion the key headline was;

BERNANKE SAYS INFLATION, JOBS SIGNAL MORE FED STIMULUS NEEDED

In essence this has put back the expectations for tapering by a few months, but that will come. The bond markets, stocks, metals and FX trading like penny stocks as Ben spoke during a Q&A session, with the EUR trading 1.3010 from 1.2880 pre-speech and 1.2840 pre-FOMC.

As an update to a previously mentioned long 10 year trade, I've closed out on this recent spike at 125*22,just over a point in price and a nice 12bps. (I do believe it will likely rise and 2.5% on 10's is going to happen, just covering to take this one directional risk off the table).

Furthermore as the Dollar has absolutely crashed, I've also covered the short DX sep futures trade for a very healthy profit, but I've also decided to flip this trade as I see this move washed a lot of Dollar bulls out and now we should stabilize around 1.30 in the EUR (key fib level). I think the bias is still to the downside for the EUR so the USD should be supported but we have to see. 

Overall some very nice trades and now we have to look ahead. Bearing in mind, nothing has changed, it's just the EUR is at a 250 pip discount to yesterday AM.


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