Oct 28. Treasuries gain as risk assets weaken

Oct 28. Eurodollars erased Monday’s losses as confidence data was weaker than expected and stocks were generally soft.  Consumer Confidence was only 47.7 vs expected 54, and State St Investor Confidence was 108.4, down from 118.1. While tech and financial companies maintain lofty stock values, a glance at a chart like US Steel (X) and the Iron and Steel sector generally paint a gloomier picture concerning basic manufacturing.
–The two year auction was well received with largest bid to cover in 2 years at 3.63.  5 year auction today.  Treasuries gain favor as risk assets are pared back.
–Today’s news includes Durable Orders expected +1.5% and New Home Sales expected 440k from 429k.  
–Red/gold pack spread continued to steepen, up 4.5 bps as reds were the star performers, up over 15 bps. 
–This morning, GMAC asks for more gov’t money.  SAP (large business software) cut its full year forecast due to weaker than expected sales (BBG).  Gaining more traction in the press are stories about Treasury stepping in to make AIG counterparties whole on CDS, while the company itself was negotiating to pay something like 40%.  The concept of Too Big To Fail is also a hot topic as top financial cos have gained more power.

Posted on October 28, 2009 at 5:22 am by alexmanzara · Permalink
In: Eurodollar Options

Leave a Reply