Nov 7. Italy edging into the forefront…

–Not much reaction to employment data, though euro$ curve continues to flatten.  Red/green (2nd/3rd yr) pack spread made a slight new low at 41 bps. US ten year yield down a couple of bps to 204.  EDH12/EDH13 settled -1 bp, new low, and probably on its way much more negative.
–The situation in Greece remains fluid, as Papandreou resigned and a new gov’t needs to be formed.  It probably can’t get much worse there. However, a big factor in “helping” Greece was to create a firewall for Italy…the flames have jumped.  Italy yields continue to rise, and Berlusconi refused IMF aid…I think I saw somewhere that he said Italy’s fine, “…The restaurants are full, the planes are fully booked and the hotel resorts are fully booked as well.”  Wake up and smell the espresso…  http://ftalphaville.ft.com/blog/2011/11/07/729571/
–A piece on Reuters last week notes that Chinese citizens have been “venting their anger online, demanding their leaders sort out China’s own problems before bailing out Europe.”
–While the financial crisis has center stage, the Washington Post has an article today saying that Iran is in the final stages of capability to produce nuclear weapons.  I’ve seen several passing references recently to possible attacks on Iran by Israel; worth paying attention.
–In the US, Seattle PI notes that many people are falling off the  unemployment data because their extended benefits have run out.  So THAT ought to help the rate edge lower.  (But food stamp usage is at all time high).  Also, a longer term, but rather interesting link on CEO and CFO confidence is here (gyst is that quarterly CEO reading portend worsening economy).  http://www.contraryinvestor.com/mo.htm

Posted on November 7, 2011 at 5:10 am by alexmanzara · Permalink
In: Eurodollar Options

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