Interest rate markets are frozen

–Yields were unchanged to slightly lower after 2 and 5 year auctions yesterday.  The largest trade of the day was a sale of 100k 3EU 9800c at 5.5 to 5.0 vs EDU2 9736-38.  The CME’s open interest sheets indicate that OI was UP 4k contracts which is quite odd since there had clearly been a buyer amassing these calls, growing the position to 245k contracts.  Implied vol pinned to low end of range.  3EZ 9737 straddle which was heavily traded at 51 on Friday settled 49.5.

–Today includes the 7 year auction and post-close results from AAPL.  Tomorrow FB and MSFT report, followed by AMZN on Thursday.  Yesterday both CAT and NVDA were clobbered after earnings reports, with the latter looking to re-test December’s low.  Amazingly, NVDA lost nearly 60% of its value from the start of October to the end of the year!  At least part of the previous rally was due to high demand for processors related  to crypto-mining.  Is all the bad news out?  

–Employment data is Friday.  Add into the mix that the US is leveling criminal charges and seeking extradition in the Huawei case, just as important US / China trade talks are scheduled Wednesday and Thursday.  FOMC announcement is Wednesday afternoon.  

–It’s polar vortex time in Chicago, which when coupled with recent snowfall, means a parking ban is in effect when you see lawn chairs holding a spot.  Voting patterns indicate a generosity of spirit with respect to income distribution in Chicago, but if you try to take the spot that I labored to shovel out, you’ll return to find your car encased in ice from the garden hose.  And it freezes quickly in these conditions.

It LOOKS inviting….

Posted on January 29, 2019 at 5:06 am by alexmanzara · Permalink
In: Eurodollar Options

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