EURIBOR RATES
Judging by how the market has been trading this first week of December you might have the idea that everything in the world is great and getting even better. Ireland seems to have been saved, remember Greece, it too must be fixed. There can't be any issues with Portugal, Spain, or Italy can there?
I wanted to share a quick picture of what Euribor trading thinks of the rally and the job of saving the world that the IMF, ECB, and of course the FED did last week.
6 MONTH EURIBOR
First, let's look at 6 month Euribor. We seem to have come off just a hair from stress levels. I'll continue to watch the "recovery"
3 MONTH EURIBOR
Next, here is a view of 3 month Euribor. I am not overlooking the impact that year-end funding decisions have here. While we are already in December it becomes increasingly tough for firms and banks to borrow over the holiday period. As a moneymarket trader in my first years on the desk, this was the scariest time to be in a position to be without funding for the firm. Most companies that needed funding and didn't already have it sewn up in the last weeks of the year were going to get punished as buyers of their risk would hold out for higher rates. I don't think that the spike and recovery here is due to year end funding, but I'm sure there is some move up (slight) simply due to the time of year.
1 WEEK EURIBOR
Finally, we have a snapshot of 1 week Euribor. Everything looks pretty good here, but take a look at what happened over the last 2 days of the snapshot. That doesn't indicate to me that everyone is comfortable that a resolution in Europe is complete.
CDS - SOVEREIGN RISK
Last as I check in on sovereign debt CDS at Markit we see that Friday's trading in CDS demonstrated that things were getting better. For 5 Yr CDS protection we see the following (which were all improvements).
Greece - 922
Portugal - 449
Spain - 294
While all of these have shown a tightening of spreads in the last week, they all are wider on a monthly basis
Be careful!
GOATMUG
Posts
NFLX, if they do raise prices, the market will send them higher...Strange. I think the short is worth a try.
ReplyDeleteNBL chart short,
http://zstock7.com/?p=3755
Zstock7 -
ReplyDeleteI appreciate the look at the NFLX trade, but do note that my entry was well above this level. There may be a few bucks left in it to the downside, but it obviously has increasing risk to move higher away from my target.
As you say, a change to pricing equals some sort of move, although I'm not ready to suggest that all the problems go away as soon as NFLX adds more revenues to offset future (unknown) costs. In fact, a pricing increase may actually destroy their business model. Who knows, that is why this was such a compelling short term trade that may be a very long term trade. I just was moved by the fact that NFLX and others in the the tech space seemed to be priced for perfection and clearly this situation and the breaking news was NOT perfection.
Don't trade based on anything I write. Check it out and do your own work. Most of all, use stops and be careful!
GOATMUG