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Time For Carry Hunting?

20 November 2017 by lberuti

If today’s session is any guide, the most interesting thing to get your teeth stuck into this week is likely to be the turkey on Thanksgiving next Thursday. Credit indices tried to open wider on the back of the difficulties Mrs Merkel is experiencing to form a government in Germany. But as the euro early weakness was rapidly corrected, credit was prompt to rally as well and indices were soon back to where they were trading on Friday. They eventually spent most of the session in a narrow trading range, a tad below Friday’s closing levels. It looks as if ALTICE’s management managed to stop the rot for the time being, while ASTIM (Astialdi) also stabilised. It allowed the market to cool off following the turbulences triggered by companies earning last week. Coupled with a shortened week in the US, it was enough to bring volatility sellers to the market and option premia cheapened. It looks quite likely that the next few sessions will see an emphasis on strategies providing enhanced carry between now and the end of the year.