Just over a month ago I posted a trade recommendation to sell front short sterling contracts (here). The trade summary was: With a 300k DV01 allocation (100k in each bucket) the current PnL on the trade is $4.1m, close to half way to the target. The trade is working nicely, but I wonder whether it … More Trade idea: update on paid short sterling
The FOMC meeting today will be accompanied by just a short statement. Outside the quarterly press conferences, the meetings tend to be less market-moving, and this one shouldn’t provide any surprises in of itself, as the March statement made clear that April was not on the cards for lift-off. However, unless the Committee choose to … More FOMC: let’s see how the market responds to pure data-dependence
Over the weekend the PBOC reduced the Reserve Ratio Requirement (RRR) for banks by more than most analysts had expected. For those unfamiliar, RRR are the fraction of bank deposits that must be deposited with the central bank; in this case the PBOC. RRR’s can be used as a monetary policy leaver, as increasing (reducing) … More China: the many policy levers of the PBOC
I am still adjusting to the fact that ECB meetings aren’t always on Thursday any more…so a somewhat late offering in terms of my views ahead of the press conference this afternoon. So can Draghi restrain himself, or will he be smiling from ear to ear and patting himself on the back? He has some … More ECB: can Draghi restrain himself?
Following Tony Blair’s recent intervention in the UK election campaign (here), and with UKIP trying its hardest to keep in the headlines, I thought a post on the economic costs and benefits of Britain leaving the EU would be worthwhile. A lot has been written on the subject since PM Cameron pledged to hold a … More Brexit: weighing the economic costs and benefits
If you are interested in the likely outcome of the UK general election on 7 May, then I can’t recommend highly enough the team at http://www.electionforecast.co.uk They are working with the US statistician Nate Silver (http://fivethirtyeight.com/) who is now widely regarded as the best at interpreting US election polls (and indeed all things statistical). The … More UK election 2015: it’s going to be messy
Just a quick note on the RBA decision overnight. The market got a bit ahead of itself in pricing in an 80% probability of a cut in April, while the majority of local analysts stuck with their call for a May cut. I was in the May camp too (see here) given the paucity of … More RBA: all to play for in May
I have spent a bit of time – over an otherwise very enjoyable Easter long weekend – thinking about the US non-farm payrolls print last Friday. Once again the market reacted strongly to a surprise, but this time it was to the downside. Front-end FI rallied, the dollar sold off and equities kind of went meh, so … More US data primer: the folly of non-farm payrolls; signal vs noise
Fundamental Macro 