Chartpoint » Aug 7. Drifting prices

Aug 7. Drifting prices

While stocks continue to press higher, there is little pressure on fixed income.  The ten year yield drifted further away from 3%, falling 1.7 to a yield of 293.4.  Eurodollar curve was marginally flatter on light volume.  China’s reserves unexpectedly rose in July to $3.118T, up 5.8 billion.  Japan’s 30 year yield pushed over 85 bps, while Germany’s 10y hovers around 40 bps.
–The dollar has eased slightly this morning after testing new highs yesterday.  JOLTS data this morning with Consumer Credit in the afternoon.  Regarding the latter, note that the last release (for the month of May) was a barn-burner, coming in at $24.55 billion, about double expectations.   The spike at the end of last year came in the aftermath of damage associated with Hurricane Harvey; there was no good reason for May’s surge.
–A little snippet from Gavekal research: “The name of the game is to lose as little money as possible in the next 12 months. For those who cannot hedge their equity positions with fixed income, cash may be advisable. The most undervalued currencies today are the yen, RMB and Swedish krona.”  Two comments, 1) warnings to lighten up on equities are becoming more common and strident and 2) I’m not sure the “fixed income hedge” will work out as advertised.
–Above is chart of Consumer Credit…
Posted on August 7, 2018 at 5:24 am by alexmanzara · Permalink
In: Eurodollar Options

Leave a Reply