Archive for the ‘Eurodollar Options’ Category
July 9. Eminence Front, or eminent domain….
The news slows People forget The shares crash, hopes are dashed People forget Forget they’re hiding. (Eminence Front Lyrics-Who) Friday’s trades continue to be geared to lower rates in a sluggish economic environment. For example, gold Sept (4EU, EDU’16 underlying) 9825/9837/9850/9862 call condor (4.0s) WITH gold Dec 9850/9862/9875/9887c cond (3.25s) were bought in total 40k…some […]
July 3.
–ISM was a large miss, expected 52 but actual was only 49.7, indicating mfg contraction. New Orders component collapsed (worst since just after 9/11 according to Business Insider), and prices were weak. Even though equities didn’t decline, the message from interest rate futures is quite clear, a slowing, stagnant economy. Ten year yield fell back […]
June 29. Italy defeats Germany in soccer; Merkel retreats on all fronts
–Germany’s loss to Italy caused Merkel to lose her bearings. Europe agreed to a deal to help fund Spain’s banks (and Italy, and Ireland) which sent euro soaring, along with other risk assets. EUR was up to 126 (from 124.36 close in ECU2). Crude oil and silver, leaders on the way down, have had modest […]
June 27. Ants and grasshoppers
–In the grand scheme of things risk assets aren’t bouncing. Oil remains near its low following deep losses in the past two months. Gold and silver, which bounced higher Monday, gave those gains back yesterday. Copper is grinding lower and the euro remains under pressure. Grains are an exception, having surged higher in June. All […]
June 22. The longest day (for long option holders in US rate futures)
–Risk assets look shaky as deflationary impulses continue. Crude oil has been the leader to the downside falling another 325 to just about $78/bbl, a remarkable plunge of over 25% since the beginning of May! Gold fell $50, and silver is fast on the heels of oil, threatening important lows from the end of May, […]
June 20. German rates now converging higher to meet peripherals…
– “When a management with a reputation of brilliance tackles a business with a reputation for bad economics, it is the reputation of the BUSINESS that remains intact.” – Warren Buffett –Germany has a reputation for low inflation and monetary discipline. Peripheral countries are seen at the other end of the spectrum. There were several […]
June 19, 2012. Is this problem the Fed’s to solve?
Going into the FOMC announcement tomorrow, one can be forgiven for asking WHY the Fed needs to do something. Corporate profits are at a record high of GDP. Cash hoards at corporations are regularly noted in the financial press. SPX is as high as it has been for three years and is less than 5% […]
June 18, 2012. Greek election gives euro short term boost
Not much change after Greek election, which eased fears of an immediate euro exit. EUR/USD rallied modestly, now above 127 having surpassed the high of the “Spanish bailout”. Underlying problems still remain, with markets now looking to Wednesday’s FOMC announcement to provide more accommodation. [Euro subsequently gave away all gains, currently 125.90 at 9:40 EST] […]
June 7. Bernanke before Congress…Yellen sketches the outline for BB to color in
–Bernanke speaks before Congress on the economy today. –Equity markets were cheered yesterday as WSJ’s Hilsenrath broke the story that the Fed was considering further easing, articulated last evening by Janet Yellen who advocated more support for the economy through balance sheet actions. Another positive factor was a rumored plan for Germany to provide aid […]
June 4. Negative feedback loop
–After Friday’s dismal economic data with NFP at only 69k, less than half of what was expected, and soft ISM at 53.5, I can pretty much just write the same thing as I wrote after Thursday’s session: yields plunged, curve flattened to new lows. But the absolute levels still leave me slack-jawed. Ten year yield […]
