March 8. Worldwide risks remain elevated

–Net change in interest rates was negligible Monday even though there were large swings in other markets.  Crude was up over $2 early in the day before easing off.  Copper was down a whopping 14 cents (potential head and shoulders top setting up). Stocks fell. While markets took some solace from the idea of a negotiated departure of Gaddafi, tensions (and oil prices) are likely to remain elevated.  The spread between CLM1 and CLM2 (crude one year spread) has gone positive, with the near contract at a premium.  The bid “for storage” that was characterized by much cheaper near contracts and tankers full of oil idling outside of ports, has evaporated almost overnight.
–Outside of the Mideast, Greece was downgraded, Portugal ten year yields hit new highs, and Spain may take nationalization steps in cajas that don’t meet new requirements by Thursday’s deadline: (Breitbart) “Under the new rules, savings banks must raise the proportion of core capital they hold to 8.0 percent of total assets from the current six percent, or 10.0 percent if they are unlisted.”
–February US budget deficit was $233 billion.  I recall when a $400 bln ANNUAL deficit raised eyebrows.
–3 year auction today.

Posted on March 8, 2011 at 5:00 am by alexmanzara · Permalink
In: Eurodollar Options

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