Archive for the ‘Eurodollar Options’ Category
Jan 10, 2019. Powell up again
Analysts noted a disconnect between fairly dovish Fed minutes, released yesterday, and the FOMC press conference. What’s clear from Fed officials’ comments over the last couple of days is that the word ‘patient’ is repeatedly used, a signal for a pause. Powell speaks today at 12:00 EST. Yesterday’s session was quiet, with the curve edging […]
Jan 9. We … sit around a lot
–Markets continue to rebound from the year-end plunge as the Fed softened and a deal with China draws closer. Oil back above $50/bbl. While one-year euro$ spreads remain inverted, calendar spreads over the first year of the Fed funds curve are flat to positive. Against a Fed Effective of 2.40% which is exactly where the […]
Jan 8, 2019. The thrill is gone
–Rate futures continued to deflate as stocks added to Friday’s gains. Bostic said he favors raising rates only once in 2019. FFF0 (January 2020 Fed Funds) settled 9764.5, a rate just 4.5 bps below the current Fed Effective of 2.40%, so the market has, in the last month, shifted from a strong stance of probable […]
Powell and NFP save the day
–Yields rebounded strongly from Thursday’s plunge as the Employment report showed continued strength and Powell re-assured the markets that the Fed would act flexibly. Stocks surged. NFP was +312k with yoy hourly earnings +3.2%. The ten year rose 10.4 bps to end at 265.7. Red through gold euro$’s were down 13-15 bps, though prices are […]
Jan 6, 2019. FLEXIBILITY
To start this note I am listing a few bullet points of important events, in reverse chronological order. It was a pretty extraordinary week. BIG EVENTS in the week 12/31/2018 to 1/4/2019 Powell soothes markets at Friday’s AEA Conference; Fed will act flexibly Blockbuster US employment report. NFP 312k. Wages increase 3.2% yoy. China cuts […]
Jan 4. Plop plop fizz fizz. Searching for relief.
–Astounding rally in fixed income with the red euro$ pack (2nd year) +18.375 bps. 5-yr treasury down 13.6 bps and 10-yr down 11 bps to 2.553% at futures settle. Yields dissipated like the tiny bubbles racing upward from Alka Seltzer dropped in water, but indigestion relief isn’t quite at hand for market volatility, even though […]
Jan 3, 2019. AAPL and FX turmoil
–Yesterday I mentioned new lows in EUR/JPY as an indication of ‘risk-off’. Early this morning the cross crashed to 118.96 and is now around around 122.50, having been around 126 last week. The catalyst seems to have been AAPL’s lowered Q1 guidance based on weakness in China. Who could have seen that coming? AAPL immediately […]
Jan 2, 2019. Weak start
Stocks off to a rocky start. Hang Seng fell nearly 2.8% with Kospi near a new low -1.5%. ESH9 currently down 40 at 2465.25. A double top separated by one day typically provides powerful resistance, and that’s how ESH9 is setting up. Thursday’s high was 2523 followed by an inside day Friday and this morning’s […]
‘Big progress’ Happy New Year!
–Trump’s weekend tweet that good progress toward a trade deal was made on a phone call with Xi is helping stocks continue to rebound, with ESH9 up 20 to 2506. In other news relating to China, Manufacturing PMI showed a contraction to 49.4, the weakest since Feb 2016. FT has a headline ‘China ending the […]
Blue Light Special
On December 27, 2018, a mysterious blue light illuminated the Manhattan skyline, as, reportedly, a power plant electric transformer blew-up in Queens. At the same time, news was circulating that Sears Holdings had just days to stay alive, awaiting a proposal from Eddie Lampert’s, ESL Investments. Now, stay with me here… Sears bought K-Mart. K-Mart […]
