I think it would be tough for me personally to dip my toe into those European markets you mention (besides Germany) without some sort of analog cash or swaps market feed. You could get smoked in a serious intelligence/liquidity trap. I doubt that ICAP is going to give someone without an ISDA agreement a swaps market feed.
With ECB looking to finish QE by the end of the year and hike interest rates in September 2019, the German curve will start getting more and more interesting and volatile. Recent flows, especially in Bunds, were affected by the Italian crisis and the bund-btp spread which had a blow out a few months ago. Now focus turns back on monetary policy with rates traders speculating on first ECB hike and strategy on ECB reinvestments. I find the Bund to be the best contract to trade relative to Buxl as it is more liquid but still moves quite a a lot. Schatz and Bobl don't move as much. There are prop shops out there, mainly in London, that trade exclusively the German curve, although most traders now trade them as outrights as opposed to spreads that was the case back in the day.
you are right mister. I prefer buxl than bund. buxl as bigger day range, though its volume is lower. anyway buxl, bund, btp are good for outright trading.
Suppose I expect the german yield curve to steepen. Since DV01 for FGBS is 24.80 and FGBL=95.80 I get and hedge ratio of 3.86:1 If I buy a 4:1 spread (long 2yr short 10yr) am I slightly long or short rates? https://www.tradingview.com/symbols/spread/4*EUREX:FGBSZ2018-EUREX:FGBLZ2018/ Thanks
Lately, those traders who have been trading Germany bonds should be very happy. those who attempt to trade currencies might be weeping and gnashing their teeth.
Indeed. But for some diversification: look at the Korean 3KTB and FLKTB bond futures. These are lately also a nice source of profit.
These are available on IB's TWS if you have a market data subscription to the Korean Stock Exchange KSE. 3KTB is the 3 year government bond future, and FLKTB is the 10 year government bond. Disadvantage of these instruments might be that you will get exposure to Korean Won (KRW). And you may have to work during Asian daylight time zone. https://misc.interactivebrokers.com/cstools/contract_info/v3.10/index.php?action=Conid Info&wlId=IB&conid=358059010&lang=en https://misc.interactivebrokers.com/cstools/contract_info/v3.10/index.php?action=Conid Info&wlId=IB&conid=358059007&lang=en https://global.krx.co.kr/contents/GLB/02/0201/0201040501/GLB0201040501.jsp