July 2. China shockwaves

–New lows in both CNY at 6.6611 and in the Shanghai Composite, -2.5%, appear to be spilling over into US markets with ESU  currently -13.50.  Bernie Sanders won the election in Mexico, except his name is Andrés Manuel López Obrador, known as AMLO.  Mexico first….another reason for tensions to increase on trade and other issues?  And good luck this morning to Mexico v Brazil.

–Modest rally this morning in US rate futures.  On Friday morning before the Core y-o-y PCE printed at the Fed’s target of 2%, the atm 120.25 straddle for the day was printing 9/64’s.  Even this morning, TYU is just 120-12, not quite through what would have been breakeven.

–Both euro and gold lower this morning.  There was an interesting post on ZH over the weekend citing BAML on the ‘cheapest hedges for a stock market crash’, and the top rated was gold calls.  Even with a stronger dollar gold appears to be in an area of support so it’s worth thinking about…

https://www.zerohedge.com/news/2018-06-30/these-are-cheapest-market-shock-hedges-right-now

–Shortened holiday week could lead to illiquidity at times.

Posted on July 2, 2018 at 5:23 am by alexmanzara · Permalink
In: Eurodollar Options

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