Dec 2. Dubai recedes/curve steeper

–Yields rose as the dollar fell and gold made a new high.  However, the two year note briefly traded at the crisis low interday below 65 bps (Dec 2008). Ten year yield gained 7.5 bps to end at 3.27%.
–Curve steepened with 2/10 treasury spread up 6.5 bps yesterday to 260.  Implied vol was softer in front end, but firmed in longer maturities, reflecting the same dynamics as the yield curve, and also receding Dubai risks.
–ISM was weaker than expected at 53.6, but still indicates growth. Today’s news includes ADP report and the Beige Book in the afternoon.  Bernanke confirmation hearing Thursday.  Employment Friday.
–From the LA Times regarding expiring COBRA tax credit: “Millions of unemployed Americans face the prospect of a huge increase in health insurance costs, thanks to the looming expiration of a gov’t subsidy. …The so-called COBRA subsidy was designed to last no more than nine months for each person who was unemployed. Hundreds of thousands who got this subsidy when it was first made available in March are slated to roll off the program today. The insurance subsidy will also no longer be available for Americans who lose their jobs starting today.”
–MF Global pulled a 10yr $250 mil bond offering due to market conditions. 
–Bloomberg (sort of flimsy) story says Goldman bankers are buying handguns “to defend themselves against public uprising”.

Posted on December 2, 2009 at 6:03 am by alexmanzara · Permalink
In: Eurodollar Options

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