March 8. Deadline for Greek debt swap agreement
Quiet session Wednesday. There was an early seller of about 6k TYJ 131.5 straddles from 113 to 111 as news from Greece suggests agreement from bondholders on the debt swap. Hilsenrath from the Wall Steet Journal floated a story that the Fed is working on a new sterilized bond buying program, which immediately had the desired effect of a jump in gold prices. FOMC meets next week.
–There continues to be sizable put buying in front of tomorrow’s employment report. Blue Dec (3EZ5) 9800/9700 put spread was bought for 19.5/20 in size of 40k….new position. EDZ’15 settled 9822. There was also some buying of green/blue pack spreads. Red/green pack spread settled 32, while green/blue settled 59.6. The market continues to accept the Fed’s vow of low rates for the next three years, and sets shorts just beyond that time frame.
–Jobless Claims expected 351k. Business Insider outlined their new methodology for predicting NFP, which derived an estimate of 285k, much higher than market expectations of 200k.
–Rhetoric concerning the slaughter in Syria has been increasing, with McCain calling for US involvement to topple Assad. The stakes are a lot higher, with Putin solidifying Russia’s resistance to interfere. The Chairman of the Joint Chiefs of Staff was quoted in a BBG piece noting that Syria has “five times more sophisticated” air defenses than existed in Libya. “The ability to do a longer-term sustained campaign would be challenging and would have to be made in the context of other commitments around the globe.”
