Archive for the ‘Eurodollar Options’ Category
First cut is the deepest?
Feb 25, 2020 –SPX fell 3.35% and Nasdaq 3.7% as coronavirus and Bernie fears gripped the market. Ten year yield plunged nearly 10 bps to end near record lows at 1.372%. 30y bond fell 8.5 bps to 1.832%. The ten year inflation-indexed yield closed at -22 bps, a level not seen since before the 2013 […]
Contagion
February 24, 2020 –Markets have finally caught coronavirus, with ESH -81 at 3258.00 and mini-Nasdaq -283 at 9175. The ten year yield is 1.42, just about 6 bps from the all-time low. ESH should have initial support 3225 to 3250, while NQH should hold above 9000. On Friday 0EH 9875 straddle settled 15.5 vs 9878 […]
Clean-up role
Weekly Comment – February 23, 2020 You all recall (or perhaps it’s just another anachronism) seeing kids in school who would use fat yellow highlighting markers on their textbooks. I would buy used textbooks whenever I could, and sometimes huge swaths of text would be completely yellowed out. It often occurred to me that if […]
The Fed balks at rate cuts that Trump and the markets want
February 21, 2020 –Buying of treasuries has been relentless, with 30’s closing below 2%, at 1.97. Curve is flattening with the two year falling 3.3 bps to 1.391% and tens down 4.8 bps to 1.522% (this morning at 1.48%). 2/10 ended at 13.1. Red/gold pack in euro$’s fell another 0.5 bp to end at 16.375. […]
Are safe havens safe?
February 20, 2020 –Minutes indicate the Fed would like to hold the line this year, saying rates are appropriate “for a time”. The market disagrees, A LOT. Buyers continue to pour into EDM0 calls, looking for forced rate cuts before summer. Kashkari essentially endorsed the market’s outlook, saying policy was about right but risks were […]
Tiffany for Breakfast
February 19 2020 –In October, Tiffany’s share price was around $90. In late November the company was acquired for just over $16 billion at a share price of 135 by LVMH. In early February, LVMH issued bonds, in part to pay for the TIF acquisition. Almost Daily Grants reports: “The deal, Europe’s largest corp bond […]
Conditions are Perfect. It’s Business Time
Feb 18, 2020 –Apparently no one could believe that COVID19 could have an impact on business until AAPL warned that it isn’t likely to meet March sales guidance laid out just three weeks ago. AAPL down nearly 6% and HSBC also lower as it’s set to cut 35000 jobs in a major restructuring. As of […]
Disruptors
February 16, 2020 -Weekly comment Disruptors. In the cutting edge investment world, it’s not a pejorative word. Disruptors are the creative destruction agents that tear down the old ways of business and force greater efficiencies and benefits. My brother and I went to the Chicago Auto Show on Saturday morning. First we had breakfast at […]
In: Eurodollar Options
All good
February 14, 2020 –Yields edged slightly lower as the treasury wrapped up the 30-yr bond auction at a rate of just 2.061%. Tens fell 1.3 bps to 1.617% and euro$ contracts had similar moves, closing flat to +1.5. A week ago Ken Griffin said markets are “utterly and completely unprepared for a jump in inflation.” […]
They lied?!?!
February 13, 2020 –In a stunning development that no one could have possibly predicted, official news outlets under-reported the cases of coronavirus, and are now correcting the error with a multiple of original estimates. China is changing personnel in affected areas. Forward looking markets are unsettled by the change, with reports yesterday having claimed that […]
