Archive for the ‘Eurodollar Options’ Category
Global Walls
January 17, 2021 – weekly comment “The treasury market’s bears had better take notice; There’s a wall of global cash poised to swoop in and buy, likely limiting the upside in yields.” So begins a BBG article from this weekend by Liz Capo McCormick et al, who I respect as a journalist, but I think […]
Long end weighed down by stimulus and price pressures
January 15, 2021 –Pressure on the long end continued Thursday with the 30y bond climbing 5.6 bps to 1.874% as Biden’s $1.9 trillion stimulus package was leaked. Tens rose 4.1 bp to 1.129 with the two year unchanged. 5/30 spread notched a new high for the move at 139. Powell was uneventful, saying that policymakers […]
Risk reversals
January 14, 2021 –Yields retraced a bit of the recent surge, with tens down 5 bps at 108.8. The combination of a strong 30-yr auction and Brainard’s comments provided midday support into the close. Key from Brainard: The economy is far away from our goals in terms of both employment and inflation, and even under […]
News of tapering is premature
January 13, 2021 –Early morning weakness in fixed income subsided after the ten year auction; yields ended only modestly higher. Tens up 0.7 bp to 113.8. 2/10 squeaked to a slight new high of 99.3. Eurodollars were flat to down 1 out to five years. Today’s news includes CPI, expected +0.4 month/month with yoy Core […]
Yields march higher
January 12, 2021 –Interesting session Monday which featured continued steepening and a push to higher yields. Tens rose 2.1 to 113.1. Back month euro$ calendars have exploded over the past week as sentiment has shifted. Red/gold euro$ pack spread (2nd yr forward vs 5th year forward) rose over 4.5 on Monday to 98.5, equaling 2/10 […]
LMF Acquisition Opportunities
January 10, 2021 – Weekly Comment In the late 1990’s, the dot-com bubble was in full force. Companies that wanted to attract investors to boost stock valuations simply added “dotcom” to their business names. There were a lot of crazy listings. What popped into my mind, and this of course is NOT crazy, is Pets.com. […]
Like putting out fire…with gasoline
January 8, 2021 –The model seems to be that you incite the crowd in a certain direction, then stand idly by as it spins out of control. And I’m talking about the Fed here…monetary accommodation to exceed 2% inflation. Add in the prospect of fiscal fuel and watch runaway asset inflation. The Fed has promised […]
A bunch of f’ing bond traders
January 6, 2021 –Markets don’t like Republican loss of Senate control. Stocks down, bonds down, dollar down. Commodities are stronger: WTI over 50 (Saudi oil cuts), March Corn over $5, and bitcoin topped $35k. Tens are over 1% with TYH 137-08. The modest threat of inflationary impulses may turn into palpable fear as the Fed […]
Tips forecast inflation
January 5, 2021 –Despite the 1.5% decline in both SPX and Nasdaq on the first trading day of the new year, interest rates were little changed on Monday, with tens ending at 91.3 bps. However, downside option protection was bought in both tens and eurodollars, and vol firmed in front of today’s Georgia Senate runoff […]
If it’s priced in dollars, it’s higher
January 4, 2021 –The dollar index is kicking off 2021 on a new low as the yuan strengthens past 6.5 for the first time since 2018. Gold has soared $40 with GCG1 at 1935, and silver is up over $1 at 27.50. Stocks, of course, are at new record highs. Corn is up 11 cents […]
