April 28. Precious metals surge after FOMC
–Two days ago Geithner said the US has a strong dollar policy. At yesterday’s press conference Bernanke said the Fed wants to keep inflation low which should help support the dollar. OJ said he wants to find his wife’s killer.
–The market gave its opinion, suggesting a loss of credibility for official pronouncements, as the dollar fell to new lows and gold and silver surged. Gold was up over $20 to a new record high, while silver (May) ran from 45.25 before the FOMC announcement to 47.50 during the press conf. But the all important equity market also continued to press for a new high, confident that monetary accommodation will continue even as QE2 is slated to end. The only problem is that boosts to the equity market (while houses languish) seems to have less and less effect on spurring consumption and economic growth.
–The curve steepened by a few bps with 2/10 at 306.5. There was a notable seller of TYN (July) 117/121 strangles from 61-57 in size of around 10k…continuous strangle selling by this player as May positions expired and previously sold Junes rot.
–Today’s news includes Q1 advance GDP expected +2.0%. Jobless Claims expected 390k. 7 year auction.
