Archive for the ‘Eurodollar Options’ Category
Higher Rates
May 13, 2026************** –I am away from the desk the rest of the week. –CPI for April was unsurprisingly higher than expected yoy 3.8 vs 3.7 exp and Core 2.8 vs 2.7. A year ago in April WTI crude was around $65. Now 102. –In part due to data, and in part due to negative […]
UNDERSTANDING HIGH FINANCE
May 12, 2026***************I was searching for this parable and finally found it…so now going out as additional missive (I thought it related well to Ares’ PIK ‘investment income’) I don’t know who to credit as original author, from 2015 ‘Mary is the proprietor of a bar in Dublin. She realizes that virtually all of her […]
On Life Support
May 12, 2026**************–There’s a lot of news this morning but I think this BBG article might be the most important: “A top South Korean policymaker said the nation should pay citizens a “dividend” using taxes on AI profits, underscoring growing pressure to redistribute gains from a boom that’s enriched chipmakers…” KOSPI index was 5000 at […]
Local real estate
May 11, 2026**************’ –From the latest Doomberg, just prior to this week’s Trump/Xi meeting: Ultimately, the sanctions weapon is an elaborate confidence game. Global players need to be held to account if they run afoul of sanctions, but if everybody runs afoul of it all at once, a run on the bank of US financial […]
Hard for yields to ignore oil shortage + wealth effect
May 10, 2026 – weekly comment**********************************Jeff Currie of Carlyle: What happens when you run out of inventories?…Oil is the same thing. From a price perspective and a share of GDP it doesn’t matter, but you pull it out of the system, it matters. …I like to emphasize, that volumes matter. We in commodities, how do […]
She was SHAKin’
May 8, 2026************* –Seen on X: “Minnesota Democrats have voted UNANIMOUSLY to BLOCK a requirement to remove DEAD PEOPLE from the voter rolls, per @GrageDustin“ –Chicago politicians breathe a nervous sigh of relief. Speaking of counting and polling, the big event of the day is nonfarm Payrolls, expected 65k from 178k last, with an unchanged […]
They saw YOU coming…
May 7, 2006************* –This is an astonishing story a friend mentioned to me: He has family with a farm near Morris, Illinois. The Dresden nuclear power plant is in this area, about 62 miles southwest of Chicago, near the DesPlaines river. Units 2 & 3 of the Dresden power plant are over 50 years old, […]
ANOTHER thing I don’t understand: “An actor out on loan” ??
May 7, 2026**************–Oil lower, stocks to new record highs. What more is there to say? Nice bounce in rate futures yesterday with SFRM7 leading, +10 on the day to 9628.5. approaching the current EFFR of 3.64 or 9636. Tens down 6 bps to 4.353. Worth a mention is that the S&P dividend yield is at […]
If Iran settles, then oil and inflation expectations wither
May 6, 2026************** –Yields edged a bit lower Tuesday as stock indexes continued to make new all time highs. 2y down 2.6 bps to 3.936%. Tens -2.8 bps to 4.414%. SOFR contracts +1 to +3. –This theme has been covered on X, but in case you missed it: yesterday the SOX index closed 51% above […]
Relentless pressure on SFRM7
May 5, 2026************* –One year forward SFRM7 made a new low Monday at 9611.5 and settled 9615.5 (-11 on the day). From the Feb 27 settle of 9706 this contract has now fallen 90.5 bps! And it is near the lowest contract on the strip, an honor now held by SFRH7 at 9613.0 or 3.87% […]
