Archive for the ‘Eurodollar Options’ Category
Oct 18. CPI today
–Today’s news includes CPI, expected +0.3 with Core +0.2 and yoy Core 2.3. In a WSJ interview from Friday, Dudley said, “I’ve never really been that concerned about the inflation outlook, as long as the economic growth materialized and that put pressure on the excess labor resources. So my focus has always been on the […]
High-Pressure Uncertainty
“If hell is expanding at a slower rate than the rate at which souls enter hell, then the temperature and pressure in hell will increase until all hell breaks loose.” –Part of the answer to a chemistry midterm dealing with Boyle’s Law. If you don’t read anything more, at least click this amusing link. http://www.alphadictionary.com/fun/hell.html […]
Oct 13. China slows; steady depreciation of yuan
–Quiet trade in interest rate futures though one-year ED calendars continued to press to higher levels. For example, EDH7/H8 settled 19, up 0.5, highest since late June. Auctions came without drama; 30 year bond today. FOMC minutes were also pretty much as expected – some members wanted to hike in a close call. Interestingly stocks […]
Oct 11. Oil up >> Inflation expectations up. Thanks Vladimir
–Light volume yesterday in interest rate futures. Big mover on the day was crude oil, with the Dec contract settling +1.49 at 51.87, just a couple of dollars off the high of the year, as Putin suggested Russia may freeze or cut output. Red/gold euro$ pack spread gained 1.375 bps to close at 50 bps, […]
Oct 10. The Weight of Debt
Consumer credit was released on Friday and showed an almost unimaginable rise of $25.9 billion for August (3rd largest since 2001). Without seasonal adjustment it jumped $46.8B, nearly the largest on record. Non-revolving rose $20 billion seasonally adjusted to a whopping $2.712T. (Non-revolving is student and auto loans). The bulk of the increase was non-revolving, […]
Oct 7. Storms brewing
–When I was a kid working on the floor of the CBOT, the way it was explained to me was, “insurance companies have to raise money to pay claims when there’s some kind of natural disaster, and to do that they sell bonds.” I don’t know if that quaint bit of market lore has any […]
Oct 6. Pushing too hard
–“Rarely do we investors get a market that we know is over-valued and that approaches such clearly defined limits as the bond market now”. Ray Dalio in remarks to the Central Banking Seminar. In his comments (posted on LinkedIn) Dalio also says. “If appropriate risk premiums don’t exist, the transmission mechanism of capital won’t work […]
Inflation expectations and oil
Oct 5. Pressure builds on long end
–From yesterday, *GROSS IN TWEET: ECB TAPER REPORT BEARISH FOR GLOBAL BONDS. Know what else is bearish for bonds? Higher inflation premiums, and that’s what appears to be starting. Gundlach says he owns tips for the first time in a long while. December Crude oil has continued to rally and this morning is above […]
Oct 4. Sweet Loretta
–Extremely quiet Monday marked by slight weakness in both stocks and bonds. While ISM was stronger than expected at 51.5, a host of other indicators point to a slowing economy, including a stall in auto sales, slowing restaurant sales (“Broad-based declines in the current situation indicators caused the RPI to fall below 100 for the […]
