Nov 3. Australia hikes again

–From BBG: Second stimulus pkg being seriously considered by Obama staff. 

–Australia raised rates again, to 3.5%.

–US retail gasoline prices hit high for 2009. CMBS delinquency rate hits new high in Sept at 3.94%.

–ISM yesterday was much stronger than expected at 55.7.  Today’s news includes Factory Orders expected +1.0%.

–Put buying dominated eurodollar option activity.  Early there was a buyer of about 20k EOX 9825p for 4.0 to 4.5.  Later, a buyer of EOZ 9787/9812p spd financed by selling EDZ9 9962/9975 strangle; paid 0.5 for package.  All appear to be new positions.

–Several stories circulated yesterday (most notably Ambrose Pierce of the Telegraph) that Japan is reaching critical mass in terms of being unable to fund its public debt. “Simon Johnson, former chief economist of the International Monetary Fund (IMF), told the US Congress last week that the debt path was out of control and raised “a real risk that Japan could end up in a major default”.

–Gold rallied strongly yesterday, but miners lagged.  NEM, ABX up small.

–Goldman offers to buy FNM tax credit.  The govt owns FNM.  Why give Goldman a discount on tax liability?

–Fed official Jon Greenlee testified the banking system still under stress. Loan quality deteriorating.  Fed data shows reserves continuing to pile up.

Posted on November 3, 2009 at 6:15 am by alexmanzara · Permalink
In: Eurodollar Options

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