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Politics : Idea Of The Day
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To: IQBAL LATIF who wrote (19506)8/25/1998 8:10:00 AM
From: IQBAL LATIF  Read Replies (2) of 50167
 
If you look at the yield curve and look at TB's Bund and Matif-- -trading at 5.45% yield or above 125 18 I can see only one thing that although I predicted this move that we are going to see lower yield as real interest rates are too high I would like to clear although this is the move I expected but the reasons for this move are not the same-

Even if I see a move albeit in my direction like we see TB's rallying now, I would not be happy if it is not for the reasons I thought should have warranted this move. My move was based on the fact that markets will realise that real interest rates are too high and hence we need a cut in interest rates on the short end, I would think that although economic numbers will keep coming strong the affect is neutralised by low CRB, and imported price stability from ASEA. Here their is a slight misunderstanding in the market view and mine markets are buying Bund Matif TB's as a protection against deflation, they think the threat is from deflation, most of the hedge funds who join the markets towards the end of the move are right now buying fixed income long term instruments. In my opinion as a biased trader I would think one strong GDP number or any strong economic number would take the air out of this speculative buying, in my opinion buying some out of the money puts on TB's for a trade would not be bad idea give some time to it but you will see your levels.

The numbers market is preparing itself for are not the kind of numbers they will get-- the strong numbers will lead to some rationalisation in the yields and will after intital selling in equity markets for say fifteeen or 50 minutes will lead to what I have explained to Steve in my previous posts a June type move with objective of hitting 8900 level and moving higher. This is just a contrary thinking and since this thread is committed to 'non-conventional thinking in my opinion a trade is possible here. I see we will be seeing 122 levels within 30 days..
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