Archive for the ‘Eurodollar Options’ Category
Market reaction muted
July 15, 2024************** –Market reaction to Trump assassination attempt is muted. Republican Nat’l Convention begins today. Powell interview with David Rubenstein, Chair of the Econ Club of Washington, DC, at 12:30. Powell likely to emphasize slowing labor market. –Curve steepened to new recent highs on Friday, with 2/10 +4 bps to -27.5 and 5/30 +1 […]
In: Eurodollar Options
Missed Me
July 14, 2024 – Weekly Comment*********************************** Post-debate a client had mentioned that the possibility that a Trump win could lead to a Fed HIKE. I dismissed that idea, but after yesterday’s assassination attempt on Trump, perhaps that scenario deserves small odds. The hike part that is, the other is becoming more of a given. Amazingly […]
In: Eurodollar Options
Cutting (talking rates here, not Joe)
July 12, 2024************** –CPI hadn’t had a negative monthly print since covid, and yesterday the headline was -0.1% (yoy 3.0) with Core +0.1% (yoy 3.3). Rate futures surged. Curve steepened with the 2-yr down 12.5 bps to 4.505% and ten-yr down 9 bps to 4.191. 2/10 did not quite end at a new high (-31.4) […]
In: Eurodollar Options
Inflation improving, job market weakening
July 11, 2024************* –Powell says he needs better data to increase his confidence that inflation is sustainably moving towards the 2% goal. Probably get it today (though he again said yesterday that the Fed’s focus is mostly on PCE prices). CPI expected 0.1 with Core 0.2 m/m. Yoy expected 3.1 from 3.3 with Core 3.4 […]
In: Eurodollar Options
National Debt Relief
July 10, 2024************** –I have to start with a story about the yawning gap between asset prices. No, I am not talking about Nasdaq vs Russell, but this example is stark as well. TheRealDeal.com reports that a 41 story office tower in NYC, 180 Maiden Lane, was bought in a short sale for $297m, by […]
In: Eurodollar Options
Powell today
July 9, 2024************* –NFIB Small Business Confidence expected 90.2. The lowest print of the year was in March, at 88.5. That has also been the lowest since 2013; there’s been almost no bounce. From the last report: “Main Street remains pessimistic about the economy for the balance of the year,” –Powell testifies today in front […]
In: Eurodollar Options
Soft employment sparks new low in SFRU4/SFRU5
July 8, 2024************ –Though the NFP print was higher than expected at 206k, the unemployment rate ticked up to 4.1% (highest since Nov 2021) and private payrolls were just 136k (only 4 lower prints in past 3.5 years). Average Hourly Earnings yoy were 3.9%. Yields fell, with tens down 7.4 bps to 4.271%. Both twos […]
In: Eurodollar Options
Nominal growth below cost of funds
July 7, 2024- Weekly Comment********************************* Never interfere with an enemy while he’s in the process of destroying himself. –Napoleon Bonaparte This quote could apply to many of the plots and subplots swirling around the modern world. The most obvious application is to Biden and the Democratic party, but it has some bearing on the economic landscape […]
In: Eurodollar Options
Payroll Friday (when no one is actually working given the 4th holiday)
July 5, 2024************ –Yields fell Wednesday in the wake of a weak ISM Services number. On Monday ISM Mfg was 48.5 and Wednesday the Service side was 48.8 (expected 52.5). Both are now in contraction territory, with the Service Employment number at just 46.1. Goods inflation has already been moderating, it looks like services might […]
In: Eurodollar Options
Happy 4th!
July 3, 2024************ –Rates eased yesterday as Powell cited progress on inflation but dangled the carrot of confidence just a bit further forward. Almost a parallel shift…tens down 4.3 bps to 4.434%; on the sofr strip reds, greens, blues and golds +4 to +5.5. Slight new high in 5/30 just above +21 bps. –Buyer of […]
In: Eurodollar Options
