Archive for the ‘Eurodollar Options’ Category
Ball of confusion
August 5, 2019 –Staggering moves this morning as China let the yuan breach 7 and suspended US agricultural imports. New highs in all treasury contracts. Red euro$ pack up 15 as of this writing with EDU0 at 9862.5 strike. Stock markets are seeing fairly large losses with ESU down 44. New low copper. Gold is […]
It’s not me. It’s you.
Aug 4, 2019. Weekly Comment Consider the Sept’19 copper chart. In Q4 it slid to a low of around 2.60 as risk assets tanked, partially in response to the Fed’s last hike in December. As the Fed made a u-turn on policy at the start of the year, it ramped up to 3.00. In the […]
August. The sleepy holiday month
August 2, 2019 –Trump’s cunning plan to announce additional tariffs on China to show Powell that lower rates are necessary went off without a hitch. Stocks tanked (SPX -0.90%) and interest rate futures have now priced two more cuts by the end of the year as a certainty. FFQ9/FFF0 (August-Jan FF spread) settled -51.25. Ok, […]
When is an easing cycle not an easing cycle?
Aug 1, 2019 –The Fed cut 25 and ended balance sheet run-off, pretty much as expected. However, Powell caught the market off-guard with comments that indicate he’s the only one that doesn’t yet realize the Fed is in an easing cycle. Stocks tanked and the curve flattened dramatically. The two year yield rose 4.4 bps […]
It’s a league game Smokey
July 31, 2019 –Is Powell’s foot going to slip over the line? –Former NY Fed chief William Dudley wrote in an opinion piece yesterday on Bloomberg that today’s rate cut may not be followed by more. He cited a concern that today’s move could “erode people’s expectations of future inflation…” The Fed continues to point […]
Beyond Budgets
July 30, 2019 –Yields eased yesterday with tens down 2.6 bps to 2.053%. The first five years of the euro$ strip were +2 to +3 bps. This morning rate futures are steady to a bit higher with US stock futures under marginal pressure. The British pound is sinking due to Brexit worries, now below 1.22. […]
Quick note
July 29, 2019 –Longer maturities were little changed on Friday with tens at 2.079% (from 2.076). However, the front end of the eurodollar curve was heavy with reds -3.0 on the day. EDM0 and EDU0 weakest on the board closing -4.0. The event of the week should be Wednesday’s FOMC announcement and press conference, followed […]
Cheeseburger. No Coke. Pepsi.
July 28, 2019 Above is an interesting graphic from The Daily Shot last week, that shows the change in price over the past year for cheeseburger ingredients. Of course, they forgot the Grey Poupon. And the bacon. An increase of 4.8%. A couple of questions. Who, in America, eats a 4 oz cheeseburger? And how […]
Q2 GDP (lower than expected?)
July 26, 2019 –Rate futures closed lower yesterday after an initial surge higher on the ECB (no rate cut, exploring additional stimulus). EDU9 closed at 9784.0 (-2.5), the lowest settle since late May. Front end continues to trade weak as t-bill supply is expected to weigh. EDZ9 also settled -2.5 at 9793.5. Once again, in […]
Jumping off a bridge
July 25, 2019 –Yesterday’s Markit manufacturing PMIs pretty dismal for US and Germany as the attached chart shows. ECB today with expectations of ease as the German bund trades negative 39 bps. An article in Reuters notes that Swiss 50-year yields slipped below zero today, “meaning none of its bonds now offer buyers any interest.” […]
