Archive for the ‘Eurodollar Options’ Category
Payrolls!
February 7, 2025****************** —Payrolls. NFP today expected 175k from 256k last. I’ve seen some higher estimates. Private payrolls expected 150k from 223k. My personal bias regarding TY and US is that a strong number will be met with dip buyers, while a weak number could cause a powerful rally. In TY I suspect the week’s […]
BIG flattener
February 6, 2025******************–Back in the Clinton presidency, there was angst about budget deficits. From Bob Woodward’s ‘The Agenda’: “Clinton recognized that it was the exact argument that Greenspan had made to him the previous month. Deficit reduction could mean lower long-term interest rates.… Clinton’s face turned red with anger and disbelief. “You mean to tell […]
Rate futures find footing
February 5, 2025****************** –Near one-year sofr calendars are pressing lower as reds led to the upside (+6.125). SFRH5/H6 settled -36.5 (9574.5, +1 and 9611.0, +5.5). In treasuries the 2y yield fell 5 bps to 4.21% while 10s were down 3 bps to 4.54, so that spread bounced a couple to 30 bps. Overall, the session […]
Only halfway thru the first MONTH
February 4, 2025****************** –Tariffs on both Mexico and Canada were tabled as both countries acquiesced to some US demands about tightening borders. China retaliated with trade restrictions. John Authers has an opinion piece on BBG smugly titled, ‘It’s Almost Like They Knew Trump Was Bluffing.’ I guess he doesn’t think Mexico and Canada really gave […]
brief note
February 3, 2025****************** –Starting the month of February with weakness in equities related to Trump imposing tariffs. Dollar surged. Fixed income markets remain weak; on late Friday’s stock sell-off treasuries also fell. TYH5 settled Friday at 108-27. Current print is 108-28+ with ESH 5985 (-82.25). –In ESH5 the 200 DMA is 5765. The low on […]
Resilience or Potential Risks
February 2, 2025 – Weekly Comment*************************************** When I started in this business, there were “Fed watchers”. Guys like David Jones, chief economist for Aubrey Langston, who would occasionally appear on the weekly financial news show, Wall Street Week with Louis Rukeyser. They interpreted what the Fed was doing. It wasn’t always immediately clear if the […]
Longer maturities accepting the idea of lower yields
January 31, 2025****************** –Q4 GDP advance estimate was just 2.3%. Today, PCE prices are released: m/m expected 0.3 from 0.1Core 0.2 from 0.1Yoy 2.6 from 2.4Core 2.8 from 2.8 –Odds for an ease in March declined slightly. FFJ5 settled 9571.5, down 1.5, around 20%, and SFRH5 settled 9575, down 1. However, deferred contracts rallied, with […]
FOMC just hawkish enough to flatten curve slightly
January 30, 2025****************** –I thought the FOMC press conference leaned slightly hawkish, but a client read it the other way, and I skimmed a couple of summaries noting that the statement was hawkish, but Powell walked it back. I would say the market supported the idea of a Fed on hold. At futures settlement, the […]
FOMC Day
January 29, 2025****************** –Boring day in rates as stocks rebounded from yesterday’s pullback (related to NVDA plunge/DeepSeek). Ten year yield +2 to 4.546%. In SOFR, all contracts from SFRU5 thru SFRU9 were -1.5 to -2.5. Vols softer. Late seller 6k TYH5 107.75/110.225 strangle at 32. Settled 32 down 3 on the day vs TYH5 settle […]
Stocks wobble; stir traders cover shorts
January 28, 2025****************** –Stock rout sparked by China’s DeepSeek. SPX -1.46%, Nasdaq Comp -3.07% and NVDA -17%. Major indices aren’t even close to the early January lows. In fact, DJIA squeaked out a small gain on the day and is near the all-time high set in December. WMT set a new ath. –Quote from Kuppy […]
