Four Barrel Carburetor
October 6, 2022
–A lot of crap news out there. This has nothing to do with markets, but good for these kids and for the guidance of the father…
| Group of teen girls transform home garage in Manatee County into an auto shopThe garage of a Lakewood Ranch home has become an auto shop for a group of teenage girls.www.fox13news.com |
–Vol was better bid as yields rose. Tens jumped 14 bps to 3.753% while twos rose 4.7 to 4.114%. OPEC cutting output by 2m bpd has the Biden admin creatively responding by threatening to release more oil from the dwindling SPR, and suggests that energy inflation is not going to quickly abate. I guess the fist-bump didn’t mean as much to MBS as it meant to Joe. Bostic said the inflation fight is still in the early days, and that fed funds need to go to 4-4.5% by year end. Current FF target 3.0 to 3.25% with EFFR 308. Expiring FFV2 is right at the Fed Effective rate (9191.75). A year out, FFV3 is 126 higher at 9565.5 or 434.5. March SOFR is more aggressively priced for hikes at 9556 or 444, but a terminal rate of 4.25-4.5% is in the ballpark. SFRH3 (9556) and EDH3 (9528) are the lowest contracts on the strip.
–After a weak day yesterday, the dollar index is rebounding somewhat this morning, weighing on stocks. Atlanta Fed GDP Now for Q3 jumped to the high of the cycle at 2.7%; the next update is tomorrow after the employment data. Not much else to say about markets, but just to round out the note and circle back to the top clip, here’s Marissa Tomei at her finest.
