Archive for the ‘Eurodollar Options’ Category
Fed talks
May 20, 2019 –Equity futures opened higher last night but have now reversed into negative territory as news headlines splash stories about the fallout from Google cutting Huawei’s access to critical products. Oh, and the US sailed a warship near the Scarborough Shoal which China claims in the South Sea, prompting a warning from Beijing […]
Fed Listens. Does it Hear?
May 19, 2019 Weekly Comment On the week, both US and German ten year yields fell 6 bps, US to 2.393% and Germany to -10.4 bps. The German bund yield is now 5 bps lower than Japan’s JGB, which ended the week at -5.2 bps. Of course, Germany runs a budget surplus while Japan runs […]
The reflation welcome mat
May 17, 2019 –Yields edged a bit higher yesterday with tens +2 bps to 2.398%. Red pack was weakest on the dollar strip falling 5.0; greens through golds were -4.5 to -3.0. Just a minor rise in yields causes USD strength which is in turn, deflationary, and should be a negative for US equities. Maybe […]
Pushing for an ease
May 16, 2019 –After weaker than expected Retail Sales and Industrial Prod data, the Atlanta Fed GDP Now forecast for Q2 was trimmed to 1.1% from 1.6. Today’s news includes Housing Starts 1209k, Philly Fed expected 9.0 and Jobless Claims. In a continuing escalation of the trade skirmish, the US blacklisted Huawei. As the yuan […]
Yields Press Lower
May 15, 2019 –In spite of a solid bounce in stocks yesterday, rate futures are at new highs this morning with TYM printing 124-20 (+9.5) and the highest contract on the euro$ curve, EDH21, just printing 9801 (+4.5). EDH21 prints 50 bps lower in yield than the current libor setting. Weaker than expected data out […]
Stuck in neutral (on the peak of a hill)
May 14, 2019 –When asked about the implications of a full blown trade war, Warren Buffet unequivocally said, “It would be bad for the whole world.” US stocks are certainly following the script, with SPX falling 2.4% and Nasdaq 3.4%. In spite of a threat by China to trim US Treasury holdings, the ten year […]
Hardening opposition
May 13, 2019 –The two sides are hardening in the US/China trade dispute, leading to a harsh reversal of Friday’s stock market rally. Yuan has posted a significant new low at 6.874, having been around 6.71 through the early part of April. While US stock indices have not taken out Friday’s early morning lows, US […]
Stay in your lane, bro
Weekly – May 12, 2019 “Relax amigo, it’s gonna look ok.” There’s a fairly amusing recent AT&T commercial set in a tattoo parlor. The tattoo artist is a big gruff guy, and the first-time client is nervously asking questions. “Just ok?” The artist simply warns as he’s getting ready to ink, “Stay in your lane […]
Escalation
May 10, 2019 At the end of March, yields took a dive. German manufacturing PMI had come in at just 44.7. Kudlow went on CNBC and called for a 50 bp rate cut. The market was clearly positioned wrong, and the fixed income rally was vicious. For example, EDM20 traded as high as 9797 and […]
Tipping points
May 9, 2019 –Stocks under renewed pressure this morning with Trump turning up the rhetoric saying China broke its deal. Treasuries have reversed yesterday’s weakness going into today’s 30 year auction. News today includes PPI expected +0.2, with yoy Core 2.5%. Trade deficit $50.1b. Jobless Claims 220k. –Yesterday’s 3 month libor setting was 2.545, the […]
