Sept 10. Yields jump as treasury concludes auction
Sept 10. Yields jumped yesterday as Jobless Claims fell (on incomplete tabulation), and the treasury concluded the 30 year auction on a soft note. Ten year yield rose about 11 bps to 2.76%. Red/gold pack spread gained 5.75 bps to just over 211. Having been as high as 4% in April, and below 2.5% recently, it appears tens might want to drift back towards the middle, or at least to 3%.
–Midcurve Sept options expire today, with EDU11 pegging the 9925 strike. The straddle settled 4.5 but traded at 4.0 during the day. E0U 9925p have approx 114k open, the calls 70k, EDU11 has 941k. Heavy liquidation of EDZ0 9962c yesterday.
–Deutsche Bank exploring a stock sale to raise capital. First in line?
–Commdoity complex still very strong with Corn at new high and lumber exploding out of a long bottoming formation (sort of inverse to bonds). However the IMF is engaging in gold sales again. The Japanese apparently don’t think that intervention will do much to stall the yen’s rise, yet central authorities still cling to the hope that they can instill confidence in fiat currencies by holding down gold.
