Archive for the ‘Eurodollar Options’ Category
April 7. Problems with QE were known long ago…
“There is a lesson in all this which it behooves every thinking man to ponder.” So ends a book that I hadn’t visited in a while, Fiat Money Inflation in France by Andrew Dickson White. http://mises.org/books/inflationinfrance.pdf This book outlines everything that is wrong with Japan’s (and the US’) current path of QE monetization, […]
April 4. BoJ “all in” on 2% inflation target
Staggering announcement by BoJ, vowing to reach 2% inflation target in 2 yrs by massive QE of $75b per month (Rtrs) “To meet its new 2 percent inflation target, the central bank will boost asset purchases to double its holdings of government bonds and exchange-traded funds (ETF) in two years.” Nikkei +2.2%, USDJPY jumped to […]
April 3. Resurgence of paper
–Trade in interest rate futures was dominated by put buying and call selling (in deferred euro$ contracts and tens). Mostly an unwind of Cyprus positions. However, net changes were modest as tens gained a bit over 2 bps to 1.862. Plently of news coming out over the next fews days including ECB meeting tomorrow and […]
April 2. ISM weaker than expected yesterday, Europe data weak this morning
–ISM was weaker than expected yesterday at 51.3 vs 54.2 last, supporting a rally in fixed income. Ten year yield fell 2 bps to just under 1.84. This morning’s mfg PMI numbers out of europe were weak, with Italy and Spain racing downward to catch France and Greece. (Respective numbers: IT 44.5, 7 mo low, […]
April 1. Contagion jumping from Cyprus to Italy?
–The Muslim Brotherhood is calling it the EU spring. –Big depositors in Bank of Cyprus to lose far more than than feared, 60% or more. (Who couldn’t have seen THAT coming?) According to ZH, Cyprus’ parliament head says there is “no future” under the troika. Given capital controls on cypriot euros, is a full exit […]
March 27. The Financial Accident clock ticks closer to midnight
–EUR making new low 128.11. (5:15am Chicago time). News out of the EU continues to be bleak: Bank of Portugal yesterday cut growth forecast to -2.3 from -1.9. Bank of Spain cut forecast to -1.5; official gov’t forecast was -0.5. Cyprus yesterday announced plans to increase emergency credit by €2.5-3.0b. Italy Industrial orders in Jan […]
March 26. Cyprus as “template”. Watch out below….
–A couple of quotes: “What we’ve done last night is what I call pushing back the risks,” said Dutch Finance Minister Jeroen Dijsselbloem, who heads the Eurogroup of euro zone finance ministers. From Moody’s: “the negotiations send messages to depositors and investors that will undermine the resilience of the euro area financial system to future […]
March 25. Cyprus deal averts euro break-up
–Friday saw continued pressure on the front end of the curve as the Cyprus banking crisis leads to reduced confidence and a possible flare-up of bank funding costs. As of this morning, a deal has been reached that will affect depositors of two banks, Laiki which will be closed and Bank of Cyprus which will […]
March 22. Russia rebuffs Cyprus. Euro$ algos
–Lack of progress in Cyprus as Russia rejected proposals for financial aid. There continues to be put buying on the front end of the curve, for example, EDU3 9900p traded as high as 2.0 late, 63 bps out of the money. EDM3 9937.5 p settled 1.75, 28.5 bps out of the money with less than […]
March 21. Troubling economic data….
–Global economic news paints a grim picture. German flash PMI down, France PMI the lowest in 4 years nearing the absolute nadir of the crisis from 2009. Cyprus remains on bank holiday, with the ECB saying it will withdraw assistance if there is no deal by Monday. Japan’s Trade deficit hit a new record low […]
