Archive for the ‘Eurodollar Options’ Category
Stimmies
November 10, 2025*********************–Gov’t is close to re-opening. Trump’s $2000 tariff dividend and idea-float of the 50-yr mortgage teeters towards desperation (in my opinion), but stocks love all of it. Bonds, not so much. –The odds of a rate cut in December should decline significantly if the administration is fueling new stimulus. That idea would work […]
The Third Mandate
November 9, 2025 – Weekly Comment*****************************************In Friday’s missive I referenced the Fed’s ‘dual mandates’ inflation and employment. I added, “The dark horse is what some used to refer to as the Fed’s third mandate, financial stability.” On Friday the Fed released its most recent Financial Stability Report. It’s a real page-turner. I’ll summarize a couple […]
Genuine Risk
November 7, 2025*******************–Good rally in rate futures which more than erased Wednesday’s losses. 10y yield fell 6.8 bps to 4.089% with TYZ5 112-265s. In SOFR, reds thru golds up 8 to 8.5. Peak contract SFRH7 is 9792, up 8 on the day. SOFR rate settling Wed was just 3.91%, only 4 bps above the Fed […]
Volfgang Twins (grab a dance partner)
November 6, 2025******************* –Tough day for rate futures. ADP solid at 42k, expected 30k. ISM Services stronger than expected 52.4 vs 50.8 exp. Treasury announced plans to keep auction coupon sizes as they currently are for next few quarters; the market had looked for more bill issuance to alleviate potential pressure on long-end yields. In terms […]
Buy one, sell the other
November 5, 2025********************–Yields eased slightly as risk was re-priced. SPX down 1.2%, Nasdaq Comp -2.0%. Bitcoin hit 125k exactly one month ago, and dipped below 100k yesterday, for a niceround 20% ‘correction’. Ten year yield fell 1.8 bps to 4.087%. Twos thru thirties down 1.6 to 2 bps. Same with the SOFR strip, all contracts […]
…you better take your diamond ring, you better pawn it babe
November 4, 2025******************* –Not a lot to talk about regarding price action in rates yesterday, but this morning the story is equity index weakness post Palantir’s results yesterday afternoon. Current ESZ -75 at 6888 and NQZ -369 at 25374 (down 1.4%). [I don’t know if this is necessary or not in today’s compliance world, but […]
NFP zero in a growing economy?
November 3, 2025*******************–Little change in rates Friday. Continued buying of 0QZ5 9700/9725cs which settled 4.75 vs SFRZ6 9688.0 (total position ~80k, paid 4 to 5). This morning Z6 prints 9690.5. It was just under 9700 when Powell said that a cut in December was “not a forgone conclusion”. High print in mid-Oct was 9717. Ten-yr […]
Diligence
November 2, 2025 – Weekly Comment***************************************** The theme that kept striking me this week is due diligence. The Tricolor and First Brands bankruptcies seem like they could have been sidestepped if someone had just checked under the hood, so to speak. (See, that’s funny, because those businesses were related to autos, which used to have […]
back of the cocktail napkin figuring…
October 31, 2025******************–Continued follow-thru pressure on rate futures from Powell’s comments Wednesday that an ease in Dec is not a forgone conclusion. Weakest SOFR contracts were down 4: both SFRH6 at 9642 and the peak SFRH7 at 9689. On 17-Oct SFRH7 traded as high as 9717.0 or 2.83%. As of yesterday, this peak SOFR contract […]
Miran neutralized
October 30, 2025*******************–Fed cut 25 as expected, but Powell made it a point to note that the outcome of the DECEMBER FOMC is far from a foregone conclusion in terms of a further ease. Markets immediately took the cue and front end was whacked. FFF6, for example, plunged from 9639 to 9631 (settle 31.5). QT […]
