April 21. TYM vol hitting new low, as Bank of Canada hints at hike
April 21. The Bank of Canada indicated rate hikes were on the way causing BAs to plunge, but eurodollars registered only slight declines and came back to close with modest losses. However, the curve flattened with reds down 3.125 bps while golds were actually up 2.5 bps. 2/10 treasury spread fell about 3.5 bps to 278.
–ABC Consumer Comfort index fell to -50, a new low for 2010, only 4 points from its all time low in the heart of the crisis. Seems to reflect the growing chasm between those with jobs and stocks, and those without. There is a large disparity between this index and Mich Consumer Sentiment, which has shown a large rebound off the lows.
— LA Mayor proposes huge cuts: (reuters) “More than a third of his proposed deficit reduction, $176 million, would come from the permanent elimination of 3,546 jobs — nearly 10 percent of Los Angeles’ public work force…” States and cities continue to struggle with budgets based on tax revenue collections of several years ago.
–Though there was some buying of eurodollar vol yesterday, I marked June ten year vol at a new low of 5.4%. TYM 117 straddle 1-31.
