Aug 29. EM FX… increasing risk
–Yields rose yesterday with tens up 3.6 bps to 288.2. Consumer Confidence hit a new 18 year high at 133.4. Stocks remain buoyant, grains. not so much. Nov Soybeans made a new low settlement at 833 1/4, down 15 cents on the day and down over 20% from the high in May. A huge crop and the China trade situation are to blame; Dec Corn also testing July’s lows.
–Vols firmed in rates yesterday with higher yields. Today brings the final leg of the auctions with the 7 year (the market often rallies out of the third auction). Economic news includes the 2nd estimate of Q2 GDP, expected 4.0%. New high yesterday in EDU8/EDZ8 at 27.25 with just under three weeks to go for September expiry. EDZ8/EDH9 is 15.5, right at its high, with the latter being a good sale IF one thinks December could be the last hike.