April 3. Resurgence of paper

–Trade in interest rate futures was dominated by put buying and call selling (in deferred euro$ contracts and tens).  Mostly an unwind of Cyprus positions.  However, net changes were modest as tens gained a bit over 2 bps to 1.862.  Plently of news coming out over the next fews days including ECB meeting tomorrow and employment data Friday.
–In the US markets, we have a resurgence of paper assets rather than physical.  While stocks press for new highs, gold fell $25 yesterday and is testing late Feb lows.  Silver and copper have broken through those lows, and grains are weak.  An article on ZH notes that oil tanker cargo rates have plunged (though crude oil price is firm).  On the other hand, Fannie Mae announced a large profit as its portfolio has soared in value. The Fed’s strategy is “working”, just like Greenspan’s when he juiced the housing market and lauded new finacial products that allowed consumers to more readily tap home equity.  In the present case, capital flows into the dollar also “help” as EU problems persist and Japan keeps pressure on the yen.
–Today’s news includes ADP expected 200k and non-mfg ISM expected 55.5.

Posted on April 4, 2013 at 9:14 am by alexmanzara · Permalink
In: Eurodollar Options

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