Oct 29. Treasury yields ease back lower

Oct 29. Nice bounce in interest rate futures as treasury auctions concluded with yesterday’s 7 year. News of the Fed sending surveys to primary dealers about QE2 helped spur the rally. Ten year yield fell back to 2.65%, down 6 bps on the day.
–Front one year eurodollar calendar spreads remain extremely low as prospects for a Fed hike are pushed backed past 2011.  For example, EDM11/EDM12 is only 35.5 bps, while EDM123/EDM14 is nearly three times as high at 94 bps. 
–Rising commodity prices could yet push forward the timetable of Fed hikes.  Even Nat Gas, which has been the red-headed stepchild of the commodity complex, made a strong thrust upward yesterday and appears ready to rally along with everything else. 
–Halliburton was crushed yesterday to the tune of a nearly 9% decline as allegations were made that the company knew cement used in Gulf of Mexico oil spill was faulty.  I wonder if the company falls under the TBTF doctrine.
–News today includes Advance GDP expected +2.0%, Emp Cost Index exp +0.5% and Chicago PMI 57.6

Posted on October 28, 2010 at 7:29 pm by alexmanzara · Permalink
In: Eurodollar Options

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