Archive for the ‘Eurodollar Options’ Category
Oct 22. US curve steepens as long end edges to higher rates
Oct 22. From a Bloomberg article: “The government has earned $25.2 billion on its investment of $309 billion in banks and insurance companies, an 8.2 percent return over two years, according to data compiled by Bloomberg. That beat U.S. Treasuries, high-yield savings accounts, money- market funds and certificates of deposit. Investing in the stock market […]
Oct 21. Dollar turns back down.
Oct 21. The dollar turned back down yesterday, commodities rallied. US rates eased slightly. –Geithner says he would like to see world economy rebalance in a sustainable way at this weekend’s G20 meeting. Apparently he believes Fed monetization of treasuries and dollar depreciation is “sustainable”. –Beige book yesterday was mixed. “There were widespread reports across […]
Oct 20. China hikes; mortgage mess continues
The two major factors yesterday were China’s surprise rate increase of 25 bps and NY Fed, Pimco et al action to put back bad mortgages to BofA. –China’s move spurred flight from risk assets. Gold fell around $40, the dollar strengthened, stocks slid. Long dated treasuries were lower early, but started to snap back, gaining […]
Oct 19. Big flattener Monday
Oct 19. All near calendar spreads in eurodollars made new lows as the very front end of the curve came under pressure. Factors include bank stock weakness stemming from the new mortgage fiasco, which may cause re-evaluation of funding costs for exposed banks. Also euribor 3 month setting has been trending higher, from an average […]
Oct 18. QE2 shows signs of failure before its start
While Bernanke confirmed a new round of QE Friday, cracks in the plan are already appearing. “The dollar’s value against the basket of currencies has decreased by 7 percent since the U.S. Fed began talk of possible quantitative easing.” (ZH/China Daily) Likewise, interest rates declined sharply. However, rates have since moved up, the curve is […]
Oct 14. Everything responds to falling dollar
Oct 14. Bernanke speaks tomorrow morning; possible policy implications. –Ten year auction was fine yesterday, and treasuries were given a bit of added juice by Fed’s POMO announcement in the afternoon. Bond auction today…it’s a little difficult to worry about possible lack of demand when the central bank acts as a backstop. To everything. –Commodities […]
Oct 13. More QE on tap?
Oct 13. FOMC minutes revealed the Fed was ready to provide further accommodation…and bonds sold off in response. The dollar started off the day stronger but eased late. New highs in corn, sugar, and CRB; new high close in soybeans and silver. –According to an article in the Financial Times, Google has been compiling data […]
Oct 11. Food crisis on horizon?
Oct 11. Let’s face it, it’s not really “inflation” that the Fed wants, the true fear is a downward spiral of asset prices spurred by deleveraging. Like we’re seeing in real estate. Upward trajectory in asset prices will hopefully create confidence, help hiring, etc. But a simple rise in the price of things isn’t going […]
Oct 8. Weaker dollar causing cracks…
The loss of government census jobs is expected to cancel out growth in private payrolls leaving NFP estimated at -10k to 0. Private payrolls expected +80k. –Outside day in gold. Possible reversals… –New lows in near eurodollar calendar spreads. There was a good size seller of about 15k EDH1/EDZ1 spreads down to 23, settled 23.5. […]
Oct 7 Zimbabwe or Japan?
Oct 7. ADP report weaker than expected yesterday. Jobless Claims today, employment report tomorrow. The problem is that the US was an asset based market based on household leverage. The official solution is to pump up paper assets with government leverage. QE2 now accepted as foregone conclusion no matter what the economic data says. –Two […]
