Risk-off tilt

Sept 3, 2019

–Imposition of Sept 1 tariffs by the US, immediately followed by China, put stocks under alert over the weekend, with continued Brexit and global trade concerns contributing to risk off tone.  TYZ9 flirting with the 132 strike this morning as safe havens draw bids.  New lows GBP and EUR, with broad dollar strength cutting off oxygen for dollar borrowers.    

–EDZ9/EDZ0 settled at a new low of -60.0 on Friday and now prints -62.0.  2/10 treasury spread closed Friday just above zero, with the ten year yield essentially unchanged at the end of the day, 1.503%.  At the end of last week, German two-year schatz was at a new low yield of -92.7 bps, with ten year bunds -70.  

–News today includes ISM Mfg and Prices, with previous results 51.2 and 45.1.  Expected today at 51.1 with a small rebound in prices to 45.8.

–The employment report comes Friday, with Powell scheduled to speak shortly afterward.  This week features many Fed speakers prior to the blackout period which commences after Powell’s remarks Friday.  But the tweets will continue.  

Posted on September 3, 2019 at 5:11 am by alexmanzara · Permalink
In: Eurodollar Options

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