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 might be worth taking some profit. Q1 GDP was softer than expected in the UK, and other activity indicators have also come off a bit (although the labour market goes from strength to strength and the euro zone is stablising/improving). But the curve has essentially just taken out the (ridiculous) rate cuts it priced after the Haldane speech (my review here) and brought forward the timing of the first rate hike a couple of months to August 2016. I still think we can get a first rate hike materially sooner and so am happy to stick with the trade.