Aug 30. Bonds sell off after Bernanke

 Substantial drop in longer dated treasuries and back end of the eurodollar curve Friday, with ten year note up 16 bps to 2.65% and the green euro$ pack up nearly 15 bps (in yield).  Most likely due to disappointment that Bernanke didn’t signal massive new QE in his Jackson Hole speech, but endless supply might also be a factor.  Even the Chairman of the Joint Chiefs of Staff says the US debt is the top threat to national security.
–Stocks had a nice rally as EUR/JPY surged. 
–Story in ZH that China is about to cut its exports of rare earth metals by 72%.  Anyone recall what happened to wheat when Russia cut its exports?
–Pop in treasury vol though eurodollar vol little changed.
–Personal Income and Spending today.
–Speaking of threats to national security, given increased violence in Mexico, the following is from January 2009 (Fox news report):
The report [by the US military] says a collapse in Mexico seems less likely, but noted that the government infrastructure is “under sustained assault and pressure” from drug cartels and gangs. A collapse within the United States’ southern neighbor would also “demand an American response based on the serious implications for homeland security alone.”

Posted on August 29, 2010 at 6:52 pm by alexmanzara · Permalink
In: Eurodollar Options

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