Dec 29. Rates jump on weak 5 year auction

Dec 29.  What  a difference an auction makes.  On Monday interest rate futures rallied after a strong 2 year note auction.  Yesterday prices slid after a weak 5 year auction.  Ten year note is again near 3.5%.  Copper made a new high, gold soared over $20/oz and silver gained over $1 as China again moved to limit the export of rare earth metals.
–Near euro$ one year calendar spreads made new highs with EDU1/EDU2 finally breaking 100…up 6 bps to 104.  Red/gold pack spread gained over 8.5 bps to 278.
–A small Michigan city (Hamtramck) is trying to file for bankruptcy, but the state of MI is trying to block the move…because its concerned the floodgates will open.  I’ll take the ‘over’ on Meredith Whitney’s prediction. 
–From the AP: “Home prices are dropping in the nation’s largest cities and are expected to fall through next year, as fewer people purchase homes and millions of foreclosures come on to the market. The Standard & Poor’s /Case-Shiller 20-city home price index released Tuesday fell 1.3 percent in October from September.”  Keep in mind that in Oct, mortgage rates were a lot lower than they are now.
–Gasoline continues to rise.  On a rolling contract basis crude oil is now around halfway back from the 2007 high around $140, and the ’08 low.
–7 year note today.

Posted on December 29, 2010 at 4:12 am by alexmanzara · Permalink
In: Eurodollar Options

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