Archive for the ‘Eurodollar Options’ Category

The People’s Economy

May 14, 2021 –Yesterday PPI was released at +6.2% with Core 4.1.  The thirty year bond auction went off at 2.395.  Fortunately, the two have nothing to do with each other.  Today we get Retail Sales expected +1.0% and U of Mich inflation expectations survey with the one-year rate expected 3.4% and longer term 2.7%.  […]

Posted on May 14, 2021 at 5:49 am by alexmanzara · Permalink · Leave a comment
In: Eurodollar Options

You WANTED inflation, well here it is

May 13, 2021 –They said there was going to be a temporary surge in inflation, and it’s here.  CPI yesterday was 4.2% yoy with Core 3.0.  Don’t expect much help from PPI today, expected +5.8% yoy with Core 3.8.  Just for good measure, the NY Fed released its Underlying Inflation Guide at 2.7% for the […]

Posted on May 13, 2021 at 5:02 am by alexmanzara · Permalink · Leave a comment
In: Eurodollar Options

“Accommodation” strategies are running out of room

May 12, 2021 –Tens rose 2 bps to 162.4 in front of today’s auction, with CPI looming this morning.  On the eurodollar strip, greens through golds settled down 2.5.  New recent high in 5/30 just over 155, which is still about 10 away from the high of the year.  Ten year tip breakeven made another […]

Posted on May 12, 2021 at 5:35 am by alexmanzara · Permalink · Leave a comment
In: Eurodollar Options

Inflation gets real

May 11, 2021 –Stocks are pushing a bit lower this morning, with inflation concerns popping up all of a sudden as an excuse.  CPI is released this morning, expected 3.6% yoy with Core +2.3%.  Auctions kick off with $58 billion in 3-year notes.  I saw a clip this morning that put the inflation story into […]

Posted on May 11, 2021 at 5:12 am by alexmanzara · Permalink · Leave a comment
In: Eurodollar Options

Basic commodities to cyberhacks

May 10, 2021 –Friday’s miss in payrolls of 266k vs 1 million expected caught the rate market leaning and sparked an instant rally in eurodollars.  Greens, the third year forward, were the strongest on the board, closing +6.625, (pack price of 9917, or 83 bps).  Near one-year calendars out to Dec’22/Dec’23 made new recent lows, […]

Posted on May 10, 2021 at 5:22 am by alexmanzara · Permalink · Leave a comment
In: Eurodollar Options

Missing the biggest threat to stability

May 9, 2021 – Weekly comment You know that women never really faintAnd that villains always blink their eyes-Lou Reed, Sweet Jane What they depict in the movies, and in political theater isn’t always true, no matter how many times it is repeated.  Inflation expectations aren’t anchored. The Fed released its Financial Stability report last […]

Posted on May 9, 2021 at 8:17 am by alexmanzara · Permalink · Leave a comment
In: Eurodollar Options

SuRpriSe!! Let’s throw some confetti in the street!

May 7, 2021 –Congrats to Bolingbroke and Spratt for being the lead article on Bloomberg this morning, highlighting the massive buying of 3EU 9800 puts, in the context of a “Jackson Hole surprise”.  This strike was bought again yesterday for 6 to 6.5, with open interest jumping another 137k to 421k.  The underlying EDU’24 contract […]

Posted on May 7, 2021 at 5:24 am by alexmanzara · Permalink · Leave a comment
In: Eurodollar Options

Inflation…in fed speakers

May 6, 2021 –Fed comments yesterday from Evans, Bowman, Rosengren, Mester and Clarida downplayed inflation even as commodities tell a different story.  Below are a couple of news bullets:  *EVANS: RISK OF AN OUTBREAK OF ACCELERATING INFLATION IS REMOTE*EVANS: MONETARY POLICY WILL BE ACCOMMODATIVE FOR SOME TIME – FED’S BOWMAN SAYS STILL SEES ‘SMALL’ RISK […]

Posted on May 6, 2021 at 5:06 am by alexmanzara · Permalink · Leave a comment
In: Eurodollar Options

Short rates tied to zero as critical input prices surge

May 5, 2021 –Crude oil is near new highs this morning at 66.35 (June WTI contract) as API data showed a large draw.  Yellen yesterday said rate increases might be needed to prevent overheating, but was forced to walk back those comments later in the day by saying she’s not expecting inflation or rate hikes.  […]

Posted on May 5, 2021 at 5:18 am by alexmanzara · Permalink · Leave a comment
In: Eurodollar Options

No inflation…if you pay in etherium

May 4, 2021 –Yields eased Monday with tens down 2.2 bps to 1.606%. Mfg ISM was lower than expected at 60.7 vs 65, but Prices Paid at 89.6 was near an all-time high.  A headline from WSJ proclaims ‘Auto Makers Retreat from Just-In-Time Manufacturing’.   I don’t know the details of the story, but I do […]

Posted on May 4, 2021 at 5:11 am by alexmanzara · Permalink · Leave a comment
In: Eurodollar Options