Feb 8. Treasury yields slip lower

–Massive put selling (liquidation) to start the day with about 35k Gold June euro$ 9775, 9750 and 9737 puts sold along with 5k Gold Sept 9750 puts.  Delta equivalent about +11-12k futures. TYH 130.5p sold in size of at least 15k.  Curve flattened with red/gold down nearly 4 bps to 156.4, off the Feb 1 high by 10 bps.
–Draghi was able to talk the euro down yesterday, though he appears to be entirely outgunned by Japan’s efforts.  Japan is rolling out the tanks to reclaim exports, Draghi’s not sure if he wants to get into a currency war.
–Consumer Credit for December was $14.6 B, surprising because revolving (credit card) was DOWN a few billion while non-revolving, (car and student loans), was up a whopping $18.2B.  As I have said before, it’s not deleveraging, it’s substituting low cost student loan debt for credit card debt.  Default rates on student loan debt are exploding, but the government is the biggest holder and will likely end up forgiving large chunks of “student” debt.
–News today includes Trade Deficit, expected $46B.  China’s Trade numbers were better than expected, supporting the idea of a rebound.

Posted on February 8, 2013 at 5:25 am by alexmanzara · Permalink
In: Eurodollar Options

Leave a Reply