Technical analysis: Short Sterling

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Short Sterling – March 2009
Wed, Jan 14 2009, 09:35 GMT
by Nicole Elliott
Mizuho Corporate Bank
Comment: UK Gilts ten’s-two’s, from the steepest in two decades at 215, collapsed to 160 basis points and over time should slowly flatten further. Two-year and Index-Linked Gilts yield 1.60%, ten-year another 160 basis points over, and about the same as Bunds. Whisper it, but the question as to who will go bankrupt next remains, and while this is the case interbank lending will remain frozen. Three-month Libor at 2.27% today is 30 basis points down from this time last week after the Bank of England’s 50 basis point cut (and promise of more if needed). The next question is whether we cut to zero in order to get Libor closer to where they would like it which looks like 1.50%. Make no mistake, these are truly emergency interest rate levels, all futures contracts priced over the mean price of the last decade at 95.000.
Strategy: Possibly attempt tiny longs at 98.550/98.495; stop/reverse below 98.190 for 97.650. Cover ahead of 99.000.
Published on
Wed, Jan 14 2009, 09:37 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
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Mizuho Corporate Bank
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