Oct 30.

Oct 30. Q3 GDP was much better than expected at 3.5%, sparking a stock market rally which more than erased Wednesday’s losses.  Bonds fell in response to better economic news.
–The question now is whether the economy can find its footing as economic stimulus measures are withdrawn.  The Fed just finished the last permanent open market operation in the treasury market.  Japan announced a phase out of corporate bond purchases.  It seems like the  home buying credit will be extended one way or another.
–While GDP was up, it’s a little surprising that a store like Office Depot saw comp store sales decline 14% in Q3.  Railroad carloads are also still down 14.8% yoy, though improving slightly.
–Large trade yesterday was sale of 40k EOZ 9775/9800p spread at 4.0. Total volume in both strikes was around 80k, open interest fell about 30k in each, so trade is an exit.
–Eurodollar curve was steeper with red/gold at new recent high of 233.
–News today includes Personal Income and Spending, expected 0.0 and -0.5%.  Employment Cost Index expected +0.5%.  Chicago PMI expected 48.5 from 46.1 and Consumer Sentiment 70 from 69.4.

Posted on October 30, 2009 at 5:25 am by alexmanzara · Permalink
In: Eurodollar Options

Leave a Reply