Emerging Markets
I think there is an opportunity to enter some receiving positions in Latin America.
Mexico. Rates lower led by the short end. I sold the forwards out to 12mths today as I am looking for the curve to flatten at lower levels. I also sold a few dollars as I think the currency has room to appreciate to 12.5000
Brazil. Rates should move lower across the curve and the currency should move lower. I am looking for a sub 2.0000 print by the end of the week. Alot of negative flows in this currency pair is out of the way and I think contra move is in the works. Remember the CB last week did not raise rates as many had expected, as such I think the curve is way to steep at current levels.
Euro. I think the Euro will probably move lower in the next week or so although I have little conviction and will not take a sizable position here.
Good Luck and Good Currecny Trading.
Labels: Trades
posted by Banker at
Tuesday, November 04, 2008
2 Comments:
Great blog!
One question: what do you mean by "Remember the CB last week did not raise rates as many had expected, as such I think the curve is way to steep at current levels"?
I would expect the 2/10 to steepen given the global slowdown.
what are your view on that?
I meant that the Brazilian Central Bank did not raise rates. I think going forward we will not see any more raises and as such I think the Brazilain Interest Rate curve is to steep.
Thanks for reading.
Banker
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