Oct. 8

Oct 8.   Light volume Tuesday as yields continue to drop.  Thirty year bond auction today; the market easily absorbed yesterday’s tens.

–Everything is rising on a sea of liquidity as stocks, bonds, gold rise while the dollar falters.  New lows in near one-year eurodollar calendar spreads.  EDM10/EDM11 is the widest spread at 136, down 7 bps on the day, and down 20 in the past two weeks.  Implied vol, (esp in treasuries) dropping as yields fall.

–Jobless Claims today expected 540k.

–Consumer Credit for August released yesterday plunged $12 B.  The market doesn’t usually pay much attention to this release, since it’s late in the day and not the timeliest of data.  However, in a consumer driven economy like the US it pretty much tells the whole story: a deleveraging household sector.  For the past three months the rate of decline has been -5.8% (Aug), -9.1% (July) and -7.4% (June). 2Q’09 was -6.6%, Q1 was -3.7%, Q4’08 was -3.0%.  Trend is not improving.

–It’s bad enough that Kanye West/Lady Gaga tour cancelled, but you know the economy’s in serious trouble when the Monster X truck show is cancelled in Madison, WI.  Organizers cited slow ticket sales as the reason.

Posted on October 11, 2009 at 6:44 pm by alexmanzara · Permalink
In: Eurodollar Options

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