Dec 3. Ten year yield holds 3%. Unemployment on tap

Ten year held 3% for now.  NFP expected 150k, with Private payrolls +158 and Mfg +5k.  Non-mfg ISM expected 54.8 from 54.3.
–Trichet delays withdrawal of liquidity, boosting near euro$ contracts.  New highs in many one year calendar spreads.  Red/gold pack spread up over 9 bps to 265. (Highest in red/gold this year is around 290 in Feb). 2/10 treasury up 2 bps to 246, new recent high.
–Interesting chart on zerohedge shows strong correlation between SP and Fed’s holdings of treasuries as a result of Permanent Market Ops.
–Strong retail sales numbers were also encouraging for stocks.  While the surge of liquidity has boosted asset prices, both Bernanke and Trichet would like to see more fiscal responsibility in dealing with the ongoing crisis.  Until then curve should continue to steepen.

Posted on December 9, 2010 at 6:49 am by alexmanzara · Permalink
In: Eurodollar Options

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