GDP strong, prices weak

April 29, 2019

–Friday’s 3.2% Q1 GDP print sparked brief sales in rate contracts, followed by new highs, as some of the details in the report portend future weakness.  An inventory build, soft prices, and a 5th quarterly decline in residential construction (-2.8%) put a cloud over the strong headline number.  The ten year note  fell 3.2 bps on the day to 2.502%.  Reds were the strongest part of the euro$ strip, closing +4.625 on a bull steepening move.  New highs in 2/10 at 21.6 bps and 5/30 at 63.2.  Jan 2020 Fed funds settled 97.82, indicating near certainty of at least one rate cut by the end of the year.

–The highest contract on the ED strip is March’21, the last red, which settled 9785.5.  The high print in this contract at the end of March was 9809 with a high settle of 9800. 

–Little change this morning, though oil is down another 70 cents to 62.60 after plunging nearly $2 Friday as Trump said he wanted to see lower prices.  Oil posted an outside range week and lower close, a technical reversal signal.

–This morning Personal Income and Spending are released, expected 0.4% and 0.7% with Core PCE prices expected 1.8%, identical to the last report.  AAPL reports tomorrow.   FOMC on Wednesday, May Day.  

Posted on April 29, 2019 at 5:11 am by alexmanzara · Permalink
In: Eurodollar Options

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