March 18. 2/10 flattens slightly

Quiet yesterday.  Eurodollar straddles fell 1-2 bps.  New recent low in 2/10 treasury spread at 272 bps, down 2.5 on the day.  PPI of -0.6% had little effect.
–The situation with Greece is again causing some concern, with possible IMF involvement. BBG says the aid package is “unravelling”.
–However, right here in the US there are continuing, growing problems with the states.  For example, Walgreens pharmacies in the state of Washington are not going to accept new Medicaid patients for prescriptions, because gov’t reimbursements fail to cover costs and make it a money losing proposition. (Seattle Times).  Idaho’s governor has signed a law requiring the state to sue the federal gov’t if the health care bill passes: “Congress is planning to force an unconstitutional mandate on the states”.  Other states have similar legislation pending. NY is suspending $500m in tax refund checks due to budget problems. 
–News today includes CPI expected +0.1, (both core and headline).  Job Claims 455k.  Leading Indicators +0.2% and Philly Fed expected 18 from 17.6.

Posted on March 18, 2010 at 5:33 am by alexmanzara · Permalink
In: Eurodollar Options

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