Jan 2, 2019. Weak start

Stocks off to a rocky start.  Hang Seng fell nearly 2.8% with Kospi near a new low -1.5%.  ESH9 currently down 40 at 2465.25.  A double top separated by one day typically provides powerful resistance, and that’s how ESH9 is setting up.  Thursday’s high was 2523 followed by an inside day Friday and this morning’s high of 2521.  End of year considerations may play a part but this area just above 2520 will likely be hard to pierce. 

–Monday featured new lows in near eurodollar calendars.  March’19/March’20 fell 2 to -15.5, and Sept’19/Sept’20 which is the lowest one-yr spread also fell 2 to -20.5.  The ten year inflation index treasury vs 10-yr note spread also fell to a new low just under 175 bps.  Market measures of forward inflation continue to slip.  However, new recent high in 5/30 at 52.5 bps. 

–EUR/JPY starting 2019 at a new low from 2018, now at 124.76 in a sign of ‘risk-off’.  The low in 2017 was 115. Gold up $8 to a new high for the move of 1289, another signal of concern.  –Markit Mfg PMI expected 53.9 with prices 58.0.  ISM Mfg expected 57.9.

Posted on January 2, 2019 at 5:10 am by alexmanzara · Permalink
In: Eurodollar Options

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