March 16. Ten year yields are comfortable between 2-2.25%

–Rates rose slightly Friday even as oil plunged over $2 bbl to 45, near the low of the move [new low last night into the 43 handle]. Ten year yield closed 211.7.  Stocks also gave back a substantial portion of Thursday’s rally.  And the euro traded below 105 as the Fed meeting this Wednesday centers around whether the word “patient” will be dropped.  In terms of treasury yields, the picture is mixed as these two stories from Bloomberg show: First, “Beware the $300 Billion Shift into Treasuries Coming from Japan”.  This article helpfully points out that US yield are relatively high.  Then from this morning “Watch out for Central Bank Sales Even as US Yields Attract.”
http://www.bloomberg.com/news/articles/2015-03-16/treasury-investors-have-cause-to-be-edgy-on-overseas-demand-data  I guess the takeaway is that there are both buyers and sellers (and both spurred from the heavy hands of central banks).  Thanks.
–The CME is charging for every bit of data these days.  On the (still free) BLOCK TRADE page at 8:28 Friday there was a trade of 70k 0EU 9837p for 16.5 covered 9853.5 (buy).  On the prelim open interest sheets, there are only 250 contracts shown as trading, with open interest down 13050 to 76275.  0EZ 9800p also bought…also appears to be a cover.  You get what you pay for?
–Here’s a question, if employment data is getting so much better then why are both student loan and auto default rates going up?  This is a bit old, from BBG mid Feb 2015…”Data from the New York Fed released Tuesday showed 11.3 percent of student loans were delinquent in the final three months of 2014, up from 11.1 percent in the prior quarter. The share of auto loans at least 90 days overdue also rose, climbing to 3.5 percent from 3.1 percent the prior period, even as fewer credit card and mortgage loan payments were late.”
–News today includes Empire State and Industrial Production, expected +0.3 with Capacity expected 79.5.

Posted on March 16, 2015 at 4:49 am by alexmanzara · Permalink
In: Eurodollar Options

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