June 22. Moves related to China fizzle

Almost all of the moves initially associated with China’s revaluation reversed.   For example, gold was up $5 early but closed down $25 on the day.  Stocks were up but gave away all gains. The euro slid.   BP was down 4.7%.  According to zerohedge Moody’s put out a piece detailing widespread ramifications if BP goes bankrupt.  Which leads to the next item: White House Budget Director Peter Orzag leaving the admin.
–Today’s news includes the 2 year note auction.  Existing Home Sales expected 6.12 M .  Richmond Fed index. 
–EDZ0 9950c paper paid 1.5 for 40k (new position).  EDN0 9950c paid 0.5 for 10k. Implied vol was crushed in eurodollars with most straddles down 2-3 bps. 
–The curve was a couple of bps steeper with 2/10 up 2 at 253.  Ten year note had a nice rebound from its worst levels of the day as stocks faltered.  Red eurodollars continue to make new highs in spite of treasury auctions this week.

Posted on June 27, 2010 at 1:07 pm by alexmanzara · Permalink
In: Eurodollar Options

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