May 4.

Stocks continue to rebound after every sell off (though lower this morning). Interest rate futures sold off as Greek rescue package reassured markets and ISM was slightly stronger than expected.  Ten year yield rose about 5 bps to 3.70%. 

–There was a seller of about 1000 TYU 114/119 strangle at 1-24; could be the start of a new sizable short. Although the rescue plan for Greece alleviates some concerns over funding pressure, EDM was unchanged on the day at 9953 and there was a buyer of about 10k EDM0 9850p for 0.5, (100 out of money with only 42 days left).

–Story on Reuters highlights the conundrum of financial regulation:  NYC tax revenues are better than expected, (which is seen as a welcome sign of better than expected growth), however the article also notes that NY is highly dependent on Wall Street, i.e. bonuses, for tax revenues. The return to profits has been led by financials which in turn boosts taxes…makes it an easy political choice to support the status quo.

–Fed’s Sr Loan Officer Survey showed a mixed bag with mostly unchanged lending standards. However, “the survey also indicated that loan demand generally weakened further.”

–Factory Orders today expected -0.1.  From Mortgage News Daily:

“Freddie Mac Says Cash Out Refinance Activity Near Record Low”

Posted on May 4, 2010 at 7:38 pm by alexmanzara · Permalink
In: Eurodollar Options

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