July 9. China supporting stocks

–China seems to be having a much larger impact on global markets.  Yuan slightly stronger and Chinese stocks rebound; here’s a clip from Reuters: “China’s bourses sailed higher after its securities regulator said on Sunday it planned to ease restrictions on foreign investment in the Shanghai and Shenzhen stock markets, and told banks to significantly cut lending rates to small businesses.”  This morning US stocks are higher, and the USD weaker, rate futures slightly lower.

–On Friday there was a seller of 100k TYU 121/122c spreads at 15/64.  This is a rolldown associated with the June 11 buy of 100k 120/122cs for 29 to 30.  Open interest fell 76k in 122 c and rose 89k in 121k, so the original position has been switched to long 120/121cs which settled 29.  Yields were lower across the board by a couple of bps after Friday’s solid employment report.  Ten year yield -1.1 to 283.9.   Red euro$ pack rose 2.5 bps.
–July euro$ midcurves expire Friday, and the Fed announced it will release its semi-annual monetary report on Friday in preparation for Powell’s congressional testimony the following week.
–A couple of late trades of note, buying of way out of the money long dated puts:  EDH21 (long dated green march) 9550p 3.0 paid for 10k; they had already settled 2.75.  Also EDM20 (long dated red june) 9587p 2.0 paid 5k, settled 1.75. and 5k EDZ20 9525p for 1.5 (1.25s).
Posted on July 9, 2018 at 5:59 pm by alexmanzara · Permalink
In: Eurodollar Options

Leave a Reply