April 6. Ten year note yield touches 4%

April 6.  Ten year note touched 4%. Crude oil continues to rally (near $87 bbl).  ISM Services were stronger than expected at 55.4 (want fries with that?) and Pending Home Sales were also cited as a sign of economic strength.  The latter isn’t so surprising as people want to take advantage of low rates and the expiring tax credit.
–Concerns about Greece are again pushing to the forefront this morning causing a bounce in US fixed income.  Greece is worried that IMF involvement might be too restrictive…
–FOMC minutes today.  Yesterday the short end of the market was gripped by the expectation of a hike in the discount rate, and near vol jumped, especially in EDU’10 where the 9937 straddle went from 27.5 to 30.  However, most of the action in treasuries was put selling even as rates pushed to their highest levels since Q3 2008. 
–Three year notes auctioned today, followed by 10’s and 30’s Wed and Thurs.
–A piece on zero hedge marks the one year anniversary of the suspension of FASB’s rule 157, or “mark to market” accounting rules.  That change was probably the biggest factor in the subsequent stock market rise, of course it may be slightly less important today as toxic paper has been shifted to FHA, Fed, FNM etc.

Posted on April 6, 2010 at 5:27 am by alexmanzara · Permalink
In: Eurodollar Options

Leave a Reply