13 Comments
User's avatar
Mark's avatar

Top read Alfie

Is the Sonia the U.K. equivalent to the US SOFR ,and to calculate the BOE future cuts do you subtract , for example the 3 month futures Sonia contract from 100 to get the predicted basis points like the SOFR

Thanks

Alfie Kerswell's avatar

Sonia is the SOFR equivalent yeah. To get the implied rate it is: 100-implied rate

Mark's avatar

Thank you

Alfie Kerswell's avatar

If you prompt an AI model (Gemini or GPT), you can tell it how to work out interest rate expectations and it’ll create you a code for Pinescript (the tradingview script), you can literally copy & paste it into there and you’ll have it on your Tradingview. Then once you’ve got the initial indicator, just prompt it to change / add things

Mark's avatar

This is brilliant thanks Alfie, I will implement this in today ,

anything to improve time and efficiency

Great stuff

Alfie Kerswell's avatar

I’d recommend you cross-check it too. E.g. give it the way to work it out, then ask it if you’ve missed any details etc and whether your exact definitions are correct. But yeah, simple tool to save some time

Mark's avatar

Ok will do

thanks for the info ,really helps

Enjoy your weekend

TSY's avatar

Similar thoughts, but was wondering if the trade should be done via 2s10s steepen instead of 2s30s steepen. DMO has been issuing more front-end gilts compared to the 30s gilts. So wouldn't doing 2s30s have a higher chance of flattening compared to 2s10s?

Alfie Kerswell's avatar

2s10s is still a good play, but 30y is more exposed to term premium than the 10y

Hannah Agbai's avatar

Thanks. This is insightful and mirrors my thoughts. How will you play this analysis via GBP/USD.

How do u think the currency scene plays out this year?. Appreciation first half and depreciation 2nd half?

Alfie Kerswell's avatar

The thing with GBP/USD is that you’re playing a weak USD leg. I’m mapping out some ideas for the currency, will be doing a report on it at some point in the near future!!

Odin's avatar

Thanks. Any thoughts on UK equities? Probably long large caps vs short small caps? (Weaker fx could add kicker?)

Alfie Kerswell's avatar

With UK equities you’d need to be sector specific, I honestly don’t think there’s much edge in general equity exposure here. Long large caps vs short small caps would probably work, but nothing worth allocation risk for (in my view)