Pot luck

June 27, 2019

–Bitcoin is once again providing an interesting roller-coaster side show, as it plunged $1800 late yesterday afternoon, rallied 1300 and is now down 2500!  Gold is also down $10, and stocks have recovered from a later afternoon press.   Rate futures are a bit lower, as the market continues to adjust to a less aggressive easing path following Tuesday’s comments from Bullard and Powell.  July/Aug Fed Funds settled -30, still certain of a 25 bp cut in July, but shaving back the idea of 50.  Aug/Oct settled -20.  Jan’20 FF settled -6 at 9834.0, which is still 71 above FFN’19, (comfortably pricing 3 cuts by year end).  The most negative one-year euro$ calendar spread is EDU9/EDU0 at -45, up 3.5 bps on the day. Implied vol oozed out of options.  Attention is now focused on Trump/Xi.  

–Q1 GDP revision expected +3.2.  KC Fed expected 1.0…regional Fed surveys have been coming out on the weak side. 7-year auction today.

–Although TYU only -3 this morning, the long end trades somewhat tired and feels like a more significant retracement is coming, having essentially held 2%.  Typically there is a rally out of the auctions, but likely to be muted today if it occurs at all.   All the crazy ingredients of US/China, US/Iran, Brexit, N Korea, and Central Bank pronouncements have been put in the pot and are now at a slow simmer on the back burner.   

Posted on June 27, 2019 at 5:11 am by alexmanzara · Permalink
In: Eurodollar Options

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