Ball of confusion

August 5, 2019

–Staggering moves this morning as China let the yuan breach 7 and suspended US agricultural imports.  New highs in all treasury contracts.  Red euro$ pack up 15 as of this writing with EDU0 at 9862.5 strike.  Stock markets are seeing fairly large losses with ESU down 44.  New low copper.  Gold is at new highs.  

–On Friday there was sizable new buying of EDU 9812c with EDV 9825/9850 c 1×2.  Nice buys with EDU9 now +6.5 to 9799 and EDZ9 +12.5 to 9817.  Oct FF print 9819.0 or 1.81% vs current effective target of 2.15%, a spread of 34.0.  Once again, the market is coming close to pricing 50/50 odds for a cut of half a percent in September.  

–Although PMI and Service ISM are released today, with latter expected 55.5. economic data is of little importance in times of stress.  

–From the low on June 3 in ESU of 2732.25 to the high at the end of last month 3029.50, the halfway point is 2881.0.  Low so far today is 2887.25.  When unexpected large events shake markets, technicals like retracement levels become more important. 

–I’ll start the week off with a classic from 50 years ago… the Temptations Ball of Confusion.

Posted on August 5, 2019 at 5:03 am by alexmanzara · Permalink
In: Eurodollar Options

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