Nov 9. Saddle up

–It was a gracious victory speech from Trump, and as he said, the work is just beginning.  “…it’s been what they call an historic event, but to be really historic, we have to do a great job.”  As the Russian proverb says, “We’re slow to saddle, but fast to ride.”

–The Trump hedge yesterday was buying EDX 9912c for 1.0, with 40k new positions added to that strike.  High in EDZ6 only 9915 on the Trump victory and now well below strike; had to be nimble to monetize that bet.  Stocks sold off but as of this writing are back above Friday’s low, when it appeared as if the FBI might derail Hillary.

–The curve has steepened fairly dramatically with TYZ up 10/32’s and USZ down over a point.  Yesterday several curve measures made new highs with 2/10 closing above 100 and red/gold ED pack spread near 63.  The trend of curve steepening will likely continue.  Without a true rout of stocks, it’s very unlikely that the Fed will be deterred from hiking next month.  Announcements relating to plans for the first 100 days of the new administration may well jolt the market into the idea that the Fed’s tightening campaign may be much less shallow than promised.

–Though I understand a decline in the dollar, with gold up $60 at one point, I fail to see how EUR traded 113.  I think the Trump win is net negative for the euro.  And it’s certainly a negative for official pollsters, and other ‘experts’ that expected business as usual.  Time to saddle up.  It might be a rough and tumble ride, but hopefully the theme of unlocking potential takes hold.

–Once again, everything you need to know is on old Simpson’s episodes (though in this case the inherited budget crunch is being laid in Trump’s lap, courtesy of Obama)

 

Posted on November 9, 2016 at 4:03 am by alexmanzara · Permalink
In: Eurodollar Options

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