Jan 11. Maybe gold’s trying to tell us something…

–Once again Powell used the words ‘patient’ and ‘flexible’ to describe the Fed’s policy stance.  The market is accepting that characterization with a current bias towards ease over the next couple of years.  Jan’20 Fed Funds settled 9758.5 (or 2.415% vs current FedEff 2.40%), but all other contracts in 2020 are above 9760, culminating in the Dec’20 contract at 9772.0.  Having wrapped up auctions with yesterday’s 30 year, treasuries are edging higher this morning with a current price 121-29.  In the latter part of yesterday’s session there was some notable buying of TY week-2 and week-3 122 calls.  The week-2 expire today and week-3 of course, are next Friday.  Settles were 3 and 12 vs 121-23; at least 10k each bought.

–It’s also January midcurve expiration.  EDH21 is now printing 9750, with the straddle having settled 4 vs 9748.  Not enough open interest there to be concerned about; news today includes CPI, expected -0.1 headline and +0.2 Core, with yoy core 2.2.  

–The hucksters that hawk gold and silver as a safe haven to threats to the financial system are having a day in the sun.  Since mid-Nov silver has gone from nearly 14 to 16, and gold from 1200 to almost 1300.  Think of the 1300 area as a wall, which may be vaulted as soon as Trump declares emergency funding for the wall on the southern border.  

–Reuters reports that China is lowering this year’s growth forecast to 6.0-6.5%.  Overt recognition of slowing conditions.

Posted on January 11, 2019 at 5:17 am by alexmanzara · Permalink
In: Eurodollar Options

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