Recently USTs moved a lot lower as yields continued to push higher on inflation fears and hawkish guidance and communication from Fed. With investors and traders focusing on the 3.5% before any significant correction in stocks.
However with the recent push hitting 3.23%, US stocks plunged sparking global risk off sentiment. As such USTs found support from safe...
As long as the uncertainty over Brexit divorce deals and irish border remains, I will be bullish on the sterling overall. A hawkish tone from BOC later today could be a major catalyst for this pair to move lower. A positive development on the brexit issue and a dovish tone from BOC later are the major risks for this trading plan.
LONG VIX SEPT FUT @12.8 TP 16-20VOLS
1. Fading risk sentiment - back of googl, msft, fb strong earnings not able to push market higher implying risk bid is over.
2. Time value - 7wks for this view to play out. I expect maturity in around 2wks but an extra 5wks of float is only positive.
