Archive for the ‘Eurodollar Options’ Category
Unemployment rate supports taper
October 10, 2021 – Weekly Comment The unemployment rate is back where it was in 2006-2007, having printed 4.8% on Friday. In this earlier period, U-rate fell as the Fed hiked rates every single meeting for two years from 2004 to 2006. In May 2004 the unemployment rate was 5.6%. The Fed began its tightening […]
The taper report
October 8, 2021 –Going into the ‘taper’ employment report, with oil near new highs and yields at their recent extremes. NFP expected 450 to 500k, which should be adequate to guarantee the onset of taper in November. Attached is a chart of the US 5y yield, 1.02% late yesterday and printing 1.04% this morning. Tens […]
Balanced
October 7, 2021 –A short-term debt limit extension helped ESZ burst out of the 4265/4360 range of October, now at 4380. Energy Sec’y Granholm suggested tapping strategic reserves, a factor in WTI pulling back from new highs. –Rate futures were relatively quiet with tens easing slightly to 1.521%. ADP data was stronger than expected at 568k, […]
No one likes higher energy prices
October 6, 2021 –I saw a few morning bullet points yesterday about inflation breakevens making new recent highs in the US and Germany. The US ten-year note vs inflation-indexed note yield spread hit 245 bps yesterday, a recent high but below the May peak of 257 bps. Energy prices continue to surge with new highs […]
Li Index
Oct 5, 2021 –Nasdaq fell 2.1% yesterday while the ten year yield rose 2 bps to 1.481%. Interest rate trading was quiet. WTI continues to make new highs, with CLX1 at 77.60 late in the day, up 1.72, through the high of 2018. Next big test would be the 2014 high around 107.50. BBG Commodity […]
Weakness in Asian shares
October 4, 2021 –Kospi at a new low since March, down 1.6%. Nikkei down 2.5% having completely erased the early September rally which had eked out a new high for the year. ESZ had been positive Sunday evening, but is now lower on the day, perhaps on continuing Evergrande issues. China’s incursions into Taiwan airspace […]
Chance – Monopoly
October 3, 2021- Weekly Comment President Xi, from September 2, “Don’t expect an easy life and be ready to struggle.” “Central banks should try their best to avoid asset purchases because in the long run they will ‘damage market functions, monetize fiscal deficits, harm central banks’ reputation, blur the boundary of monetary policy and create […]
At all costs
October 1, 2021 –Weak close in stocks to end the month as both ES and Nasdaq show signs of a broad topping pattern. While Congress wrangles with the debt ceiling and social spending bills, and the Fed hangs on to the tattered narrative of transitory inflation pressures, the message from China is blunt: “China orders […]
It’s temporary
September 30, 2021 –Schumer says the Senate reached a deal to avert a government shut-down through December, but the debt limit needs to be raised before October 18, according to Yellen (two separate issues). Stocks appear to be responding positively. –Energy shortages continue to dominate headlines. China’s Mfg PMI slipped to 49.6 indicating slight contraction […]
In: Eurodollar Options
Federal debt has a ceiling. Crude oil calls don’t
Sept 29, 2021 –Yields jumped as energy costs continue to surge, with the debt ceiling process adding drama. Tens up 5.4 bps to 1.536%. Once again the eurodollar curve steepened, with many one-yr calendars edging to new highs. Peak EDU’22/EDU’23 settled 72.5, up 1 at a new high. Red/gold pack spread settled over 120 bps, […]
In: Eurodollar Options
