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Posts Tagged ‘interest rates’

If u missed going long on Vix volatility

In Japan on 06/04/2018 at 4:24 am

Try this trade courtesy of FT?

Sticking with Japan, its government bond market has been astonishingly calm in recent years. Reflecting the Bank of Japan’s “yield curve control” policy, coupled with negative interest rates has kept 30-day average volatility of the JGB futures contract at just 0.88 per cent. That is the lowest since at least 1985 and compares to the US Treasury contract’s 3.88 per cent volatility.

Daniel Stone, co-founder of hedge fund Ionic Capital Management, reckons that one of the best trades in markets today is betting on this calm being shattered. He points out that it is “extremely” cheap to buy derivatives that give investors exposure to Japanese bond turbulence over the next five years, and estimates that just a 40 basis point move in the market’s implied volatility would more than double an investor’s money. A bigger 150 bps move would net investors a sevenfold return.

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Tighten yr belts mortgagors

In Economy, Financial competency on 05/11/2015 at 1:20 pm

Enjoy Deepavali but be prepared to suffer during Christmas, New Year and CNY. Interest rates are likely to go up.

Just over a week ago when I wrote this,  interest rate futures implied less than a 3o% chance of a tise by the Fed in December (markets didn’t think the Fed would raise), whereas the odds were close to even (could go either way) yesterday morning our time. Then in NY time, interest rate futures moved to price in a 58% possibility of rate “lift-off” occurring in December, up from 50% earlier in the day. Chairman of Fed said December would be a “live possibility” for a rate rise if incoming data supported that expectation.

Side-effect of Japanese reconstruction

In Economy, Japan on 15/03/2011 at 6:40 am

Higher US (and global) interest rates are in the offing as Japanese govt and investors sell US treasuries to raise funds for reconstruction. Remember Japan is the second largest investor in US government paper. China is the largest.

Reasoning.

If so, S’pore’s interest rates could go up. What with Mah Bow Tan building more HDB flats and plenty of private supply coming on-stream, we could be in for some interesting times. And all these before factoring-in a possibility of a US recession as interest rates rise,