Feb 22. Treasuries edge to higher yields on Greece agreement
–Fairly uneventful Tuesday given what appears to be an agreement to resolve the Greek debt situation. Yen continues to weaken with EUR/JPY at a new high (80.12). Stocks gave back Monday’s gains (in futures) and closed essentially unchanged from Friday. The big winners were crude oil, still being lifted by mideast tension and central bank liquidity measures, and gold which closed up about $35 from Friday close. Oil closed at its highest level since May of 2011.
–Near eurodollar calendar spreads were able to make new highs with EDZ12/13 at 18.5/19.0 (settled 18.0). The curve was generally steeper, with tens gaining 4 bps to 2.05%. Treasury auctions 5’s today and 7’s tomorrow; the “safety” bid for treasuries eroded at the margin as Greece stumbles toward a temporary reprieve. Eurodollar straddles also fell about 1-1.5 bps as uncertainty eased.
–From Detroit News: “Last year, U.S. drivers logged 35.7 billion fewer miles over 2010 — down 1.2 percent — to 2.963 trillion miles, the Federal Highway Administration reported.”
–The BOE voted 7-2 in favor of a £50 billion increase in easing. China eased restrictions on some home buying rules.
