- Much fun trading 3.25%-3.50% the past few weeks. Still think UST 10 years are cheap around 3.37%. Perfect candidate for hedge against heavily Risk On core book. Positive carry hedge stuck within a range.
- However, technicals beginning to warrant caution to this line of thinking. Weekly chart indicate formation of triangle = uptrend continuation if breaks. Upside break of 3.48% would be bad news (pointing to 3.80-ish). Makes sense if one favors Risk On which should really drive rates higher.
- Action taken here : Reduced naked short TY hedge by selling bunds (which looks more even more bearish than UST). Will be looking to reduce the balance of the naked TY position further on rallies.
2 comments:
Sold TYH1 @ 120-145. Almost all of remaining long TY position against short Bunds now.
Balance naked long squared at 120-16
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