Archive for the ‘Eurodollar Options’ Category
August 12. Falling prices
–Another day, another, another devaluation by China (even though it was termed a “one-off” event yesterday). It’s like one of those big smiley faces in Walmart ads, that falls to reveal lower prices. New fresh lows today in many other Asian currencies vs USD, including Korean won, rupiah, baht, Indian rupee. US ten year yield […]
August 11. …if you go carrying pictures of Chairman Mao
“But if you go carrying pictures of Chairman Mao, You ain’t going to make it with anyone anyhow.” – John Lennon, “Revolution” 1968 –By devaluing (1.9%), China just removed another reason for the Fed to hike. From a Bloomberg article quoting Stephen Roach, China’s action “…raises the distinct possibility of a new and increasingly destabilizing […]
Shades of 1997/1998
THEMES: Employment report ‘solid but unremarkable’; hike still on the table for Sept Curve crushed on Friday Factors behind long end rally Similarities in 1997/1998 — Interesting charts in this section ————————————————————————————————————————— 7/31/2015 8/7/2015 chg UST 2Y 67.2 72.1 4.9 UST 5Y 154.7 158.2 3.5 UST 10Y 220.5 217.3 -3.2 UST 30Y 292.9 282.8 -10.1 […]
August 7. Deflationary winds vs US wages
–Employment report today with NFP expected 225k, avg hourly earnings +0.2 from 0, yoy expected +2.3% –Yesterday saw yields ease slightly as the Bank of England pushed back rate hike expectations on a subdued inflation forecast and US stocks wobbled with notable weakness in entertainment and broadcasting. Yields were down about 3 bps across the […]
August 6. Service job growth in focus going into payrolls
–Yesterday’s ADP was lower than expected at only 185k. However, that news was overwhelmed by an extremely strong non-mfg ISM of 60.3, vs expected 56.2. The ten year yield jumped 5.8 bps to 226.5. Going into Friday’s employment data, odds have again shifted toward a hike in September. Yesterday’s EDU5 settle of 9960 was the […]
August 5. Canada, China and Indonesia
–So Lockhart opens his big yap and says the bar is high to NOT tightening in Sept. 5/30 immediately plunges to a new low of 128.5 (futures close it was 129.3). Yields rose across the curve with tens up 6 to 220.7, and the green euro$ pack down just over 9 bps. The dollar strengthened. […]
August 4. New lows curve and industrial materials/ oil
–ISM was slightly weaker than expected at 52.7. New export orders fell 1.5 points to 48.0 for the 5th sub-50 contractionary reading of the last 7 months. However, the larger story continues to be the plunge to new lows in oil (late CLU -1.80 at 45.32) and metals, and the strength in the dollar especially […]
Aug 3. New lows oil, copper and CAD
–As of 6:00 NY time, Crude Oil is making a new low, down 70 cents to 46.40, and Canada $ also posting a new low, as is copper. The Caixin/Markit Manufacturing PMI for China fell to 47.8 in July from 49.4 in June, lowest since July 2013. –On Friday, US yields fell as ECI was […]
Aug 2. Weekly review, Low wages, high (junk) yields
THEMES: FOMC in play and out of play within the space of two days Hi-yield funds and discounts… an overhang of debt Hi-tech and creative destruction ————————————————————————————————————————— 7/24/2015 7/31/2015 chg UST 2Y 67.8 67.2 -0.6 UST 5Y 162.0 154.7 -7.3 UST 10Y 227.1 220.5 -6.6 UST 30Y 297.4 292.9 -4.5 GERM 2Y -22.5 -23.2 -0.7 […]
July 31. Flatlining
–Hard flattener yesterday as 5/30 ended at 133, down 4.6 bps, its lowest level since early May. Out of the blue, three clients mentioned curve inversion. How does the curve invert with 2’s under 100 bps? To this day I remember coming on to the CME floor one morning in the 1990’s and having to […]
