Sovereign Debt Yield Spreads

[TheNegotiator 13]

I wanted to see how much attention TL users are currently paying to European Sovereign debt and specifically the spreads between the various 10 year government bond yields and the benchmark German 10 year (bund). How much do you look at the movement of sovereign debt spreads as a measure of risk, on a day to day basis? Does it factor into your trading in any way, mechanical or not? Or is there another way you track Europe?

 

Anyway, for those who don't know where to get the data, Bloomberg has it:-

 

Portugal

Ireland

Italy

Greece

Spain

France

Belgium

United Kingdom

[Obsidian 10]

I pay attention to what the market is paying attention

Europe was a mess one year ago, still is

[TheNegotiator 13]

I pay attention to what the market is paying attention

Europe was a mess one year ago, still is

 

Of course, but how do you account for it in your daily trading plan and routine?

[Mysticforex 13]

I am aware of them, and pay some attention when there is a new auction. But really plays no part in my trading. Do you think I am missing out on something ? Do you find any correlation to the Futures Markets ?

[Obsidian 10]

Of course, but how do you account for it in your daily trading plan and routine?

 

This week is in deed a good example. I don't short eur ahead of EU summits. although these summits never solved the real problems behind this recent situation, there are people who hopes that politicians will do a magic trick...of course this is the nature of market and necessary to cause price movements...

[TheNegotiator 13]

I am aware of them, and pay some attention when there is a new auction. But really plays no part in my trading. Do you think I am missing out on something ? Do you find any correlation to the Futures Markets ?

 

The markets are reacting at the moment to news from Europe, so even if you're not checking the yield spreads, it's easy enough to work out what's going on if you wake up to way different prices. The idea for me is that if the markets are reacting directly to specific problems/revelations about Europe, there is a danger of much stronger moves taking place. If this is the case, you are more likely to see yield spreads widening. It "sets the scene" if you like.

[TheNegotiator 13]

This week is in deed a good example. I don't short eur ahead of EU summits. although these summits never solved the real problems behind this recent situation, there are people who hopes that politicians will do a magic trick...of course this is the nature of market and necessary to cause price movements...

 

Fair enough, but I was talking about yield spreads...

[TheNegotiator 13]

Interesting to look at those yield spreads today vs how markets are moving...