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did anyone noticed, the days before NFP report of last week, any signal telling whether ZB was expensive or cheap relative to ZN and UB?
@tbondtrader and @TopGunNote I haven't seen any post on your bond threads, I was just curious to know if (and if so sharing how) you could trade ZB across last week NFP.
Thanks.
Hi,
my understanding, (which may very well be wrong), is that if one can (how?) verify or, better, has verified that the whole yield curve is going to a given direction, (let’s suppose it is, temporarily, going to raise) there might be some of its components, for ex let’s say the 5yr and 30yr actually getting there (raising) relatively faster than other components, say 10yr. If this can be verified (!), for ex by looking at the movements of the 1) overall, 2)front end, 3)back end of the yield curve, then, soon or later, the 10yr should start to catch up and should therefore start to move, relatively, faster than 5yr and 30yr; so unless one believes (5yr and 30yr) vs 10yr will keep diverging one another, this could be a good timing to go, temporarily, long ZN and short (ZF + ZB).
I am a bit confused myself about all this, however, at least for the sake of stimulating discussion and of involving additional opinions or perhaps suggestions (by other experienced traders working with the yield curve), I hope it can make some sense.
