Archive for the ‘Eurodollar Options’ Category
Aug 28. Consumer Confidence and stocks
Below is a chart with Consumer Confidence (in white, new high today at 133.4) and SPX (in amber, also new high). Obviously since 2008 these two are joined at the hip. High consumer confidence is usually associated with propensity to spend by economists, and so is thought to be supportive of consumption. But confidence is […]
August 26. We’ll fix it when it breaks
Powell’s Jackson Hole speech was interesting, if only in terms of its omissions. Perhaps in response to recent criticism of the Fed, it was pretty much boilerplate, “Stay in our lane” type stuff. Stick to our mandates and manage expectations amid myriad uncertainties. What was the most glaring omission? Reference to financial stability, which some […]
August 24. Jackson Hole
–New low again in 2/10 treasury spread which was printing 21 at the futures close, and 20.25 at the time of the equity close. Dallas Fed president Kaplan was on CNBC and said that the flat curve at the long end reflects market expectations of sluggish future growth. In the same interview with Steve Liesman, […]
Aug 23. Tremblers
https://www.federalreserve.gov/monetarypolicy/fomcminutes20180801.htm –From the Fed minutes: ““The staff’s analysis indicated that… there was a meaningful risk that the ELB [Effective Lower Bound] could bind sometime during the next decade.” I don’t like the sound of that. “Bind”. Like underwear. –Why did the Aug 1 FOMC minutes start with staff analysis of how the Fed might handle […]
August 22. Trump rally at risk
–Stocks had a slightly negative reaction to the political uncertainty unleashed by Cohen’s plea and Manafort’s conviction. At yesterday’s settlement rate futures were down a couple of bps and the ten year yield was up 2.3 bps to 284.4; those losses have been erased as of this morning. While not quite at the low of […]
Aug 21. You want something to cry about? How about Fed policy in 2005?
–You want something to cry about? I’ll give you something to cry about. I heard that one a few times in my childhood… –Trump whined yesterday about Powell’s Fed raising rates, thus making a delicate job even more difficult. Some think Powell might counteract those comments with an extra dose of hawkishness, but as a […]
Aug 20. Edging higher
–USD slightly higher this morning, as are metals, as are stocks. TRY weakening after Friday’s downgrade, but Venezuela’s 95% devaluation a sign of things to come. Big event of the week will be Powell’s speech at Jackson Hole on Friday. Fed minutes released on Wednesday afternoon. Bostic comments today with Q&A. –Yields essentially unchanged Friday, […]
August 19, 2018. THINK
“You better think about the consequences of your actions.” Aretha Franklin to Matt Guitar Murphy. *old youtube link of Matt Murphy at bottom, who also passed this year. “Ma’am you gotta understand that this is a lot bigger than any domestic problems you might be experiencing.” Elwood. In the famous diner scene in the Blues […]
August 17, 2018. Philly Fed omen?
–Philly Fed index was a pretty big miss at 11.9 versus expected 22, especially when benefits from tax legislation are supposed to be coursing through the economy. Could be an outlier, but this decline appears similar to 2015, which encompassed the last energy and emerging market rout. Recall that hi-yield was crushed at that time, […]
August 16. Asia lower, but bouncing elsewhere
–Yields pushed lower yesterday on a ‘risk-off’ theme sparked by emerging market concerns (but we’re seeing ‘turnaround Thursday’ so far this morning). US tens fell 4 bps to 2.85%. While Turkey’s currency bounced, the broader issue of EM USD-denominated loans is leading to stress. Is it tariifs, or is it the gradual withdrawal of dollar […]
