Jan 21
BBG reports that Obama will propose rules on banks’ proprietary trading. Looks like a win for Volcker and de-emphasis of Geithner/ Summers.
–Stocks and commodities tumbled yesterday as the dollar soared. Gold fell $30. Dollar index appears poised for further gains, which could cause flows out of risk assets into treasuries. Curve flattened with 2/10 treasury spread down about 3 bps to 277.5, while red/gold eurodollar pack spread fell just over 4 bps to 271.
–Implied vol down in treasuries, though ML was a late buyer of about 7k TUH 109c for 5. A recent theme seems to be out of the money call buying over the past week or so, mostly in euro$’s. For example, there has been some buying in Grn march midcurve calls, yesterday the 9762 strike in size of 3k. Also the 9975c has been bought in March and Sept.
–BBG says Papacontstantinou denies a report the EU is preparing a loan for Greece. Greek 10 year yield premium at highest level since euro’s introduction.
–Today’s news includes Job Claims expected 440k. LEI expected +0.7. Philly Fed expected 18.0 from 20.4.
CNN Money Jan 20. The Air Transport Association of America said total passenger revenue for the major U.S. carriers fell 18% in 2009 versus the year before. It was the largest drop on record, exceeding the 14% decline in 2001.
The revenue decline was due to a 6% drop in passenger volume, and a 13% plunge in the average price paid to fly one mile, the ATA said.
