Archive for the ‘Eurodollar Options’ Category
We’re all Krugers now
July 24, 2019 –Stocks ramped up in the afternoon on news of face to face talks with China. However, a US Dept of Justice probe into big tech turned Nasdaq, which is down 50 as of this writing. Silver near a new high, euro testing the year’s low. –Yields rose yesterday, up 2 to 3.5 […]
Stealth MMT
July 23, 2019 –Rates were little changed across the curve yesterday, apart from weakness in the front end of the dollar curve. While every contract from EDU20 back through golds closed +1, EDU9 fell 2.5 and EDZ9 fell 1 bp. Therefore, new lows were posted in the first two one-year calendar spreads with EDU9/U0 at […]
Locked on 25
July 22, 2019 –Several news services, including BBG and WSJ, are reporting that the Fed will likely cut 25 bps next week. After a volatile end of the week following NY Fed’s Williams speech on Thursday, the market has comfortably priced 25. However, additional cuts are also being priced with more confidence. For example, Aug/Oct […]
Annoying Peasant
July 21, 2019 – Weekly comment King Arthur: I am your king. Peasant Woman: Well, I didn’t vote for you. King Arthur: You don’t vote for kings. Peasant Woman: Well, how’d you become king, then? [An angelic choir begins…] King Arthur: The Lady of the Lake, her arm clad in the purest shimmering samite, held […]
Where’s that powder?
July 19, 2019 –The head of the NY Fed, John Williams, threw the market into a tizzy with his speech yesterday, ‘Living Life Near the ZLB’. Here’s the zinger: [when there are signs of a slowdown] “DON’T keep your powder dry – that is, move more quickly to add monetary stimulus than you otherwise might.” […]
Funding pressures looming?
July 18, 2019 –Stocks slid late yesterday, prompting a bid in rate futures. The WSJ cited ‘Weak earnings weigh on global stocks’. Some pointed to continued snags in US/China talks relating to Huawei, and the gen’l malaise in global trade, NFLX lost US subscribers, sending the stock down 10% (I believe market cap was around […]
Purchasing Power Parity
July 17, 2019 –Yields up Tuesday as Retail Sales were stronger than expected +0.4 and +0.7 ex-auto and gas. However, import and export prices were soft. In any case, tens rose 3 bps to 2.12% while the euro$ strip from reds through blues were -3.5. Though the US economy seems to maintain momentum, Chicago’s Evans […]
Slow grind
July 16, 2019 –It was a slow Monday with a bias towards a flatter curve. Tens fell 1.6 bps to 2.09%. Powell speaks this afternoon, ‘Aspects of Monetary Policy in the Post-Crisis Era’. Data includes Retail Sales expected +0.1 for both headline and ex-auto and gas. Industrial Production also expected +0.1. I believe Fitch yesterday […]
Monetary Order
July 15, 2019 –Friday featured a slight decline in rates with tens -1.3 bps to 2.106%. The curve edged steeper. There was a large new 5/30 option steepener that blocked, buy of 10k USU9 151 puts at 41 to sell 40k FVU9 116.75c at 11. 5/30 cash closed 77.4 bps. I marked the ten year […]
Often Wrong, Never in Doubt
Weekly Comment – July 14, 2019 That’s a YZ saying. “Often wrong, never in doubt.” I don’t know whether he originally made it up, or heard it from someone else, but when he says it over a beer-drinking trading discussion with such obvious relish, it absolutely crystallizes everything about the trading profession and many people […]
