Technical analysis: Short Sterling
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Short Sterling – March 2009
Wed, Oct 29 2008, 09:44 GMT
by Nicole Elliott
Comment: A stampede into two-year Gilts over the last four months has taken yields to 3.00%, levels that Britons cannot really imagine, and their lowest since about the late 1940’s; investors realising the Bank of England is way ‘behind the curve’. The yield differential between these and ten-year Gilts is 130 basis points, the widest since 1996, and futures contracts trading around 96.700 are the most expensive ever (and some calendar spreads the most inverted ever too). Terrible times, drastic pricing. But will it work? Who knows. Today banks are fretting about month-end, next week’s MPC meeting, and then how to get through year-end. Money has dried up again, indications of 2,3, and 4-month Libor 5.83%, 5.92% and 5.99% respectively making the spread over TBills the widest ever. We are merely taking one day at a time and forecasts are probably not worth the paper they are written on. Anyone who thinks things are getting back to ‘normal’ really ought to get a grip.
Strategy: Stand aside if possible and use the Gilt market for any savings. For the very daring: attempt shorts at 96.465; stop/reverse above 96.550 for 96.750 and then 97.000. Cover between 95.750 and 95.200.
Published on Wed, Oct 29 2008, 09:47 GMT
Archive
- Short Sterling – September 2009
Published On Wed, Jul 1 2009, 08:26 GMT - Short Sterling – September 2009
Published On Wed, Jun 24 2009, 09:18 GMT - Short Sterling – September 2009
Published On Wed, Jun 17 2009, 08:29 GMT - Short Sterling – September 2009
Published On Wed, Jun 10 2009, 08:19 GMT - Short Sterling – September 2009
Published On Wed, Jun 3 2009, 09:03 GMT
Mizuho Corporate Bank
| 1-3-3, Marunouchi, Chiyoda-ku, Tokyo 100-8210
http://www.mizuho-cb.co.uk | Nicole.Elliot@mhcb.co.uk
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