Sept 20. Italy downgrade by S&P. Greece makes bond payment

Markets fought back from losses Monday as hope for a solution to Greece lingers.  S&P cut Italy ratings by a notch, which was also taken in stride.  New low in the 2 year note of only 15 bps.  Tens are back below 2% at 1.95.  All treasuries have taken out crisis low yields of 2008/9 except for bonds, which had plunged to 2.5% and now sit at the lofty level of 3.21%. FOMC meeting begins today, with an announcement tomorrow afternoon.  Eurodollar curve flattened dramatically with (new) red/gold pack spread down 12 bps to 197.
–EUR/JPY nearly made a new low, trading briefly below 104, but came back to close above that level.  Copper made a new low for the move.  Gold and silver both weak.  Oil was down over $2.  A tilt back toward deflation is slowly settling in; likely to become a more prevalent theme if the dollar maintains strength. 
–AAPL made a new high even as the general market was selling off.  It’s hard to tell if this is a defensive move into the new “safe haven” or if it reflects underlying buying power based on huge liquidity (even as financial stocks remain mired near their lows).  Nearly every expert says AAPL is cheap relative to earnings growth, but it’s still an impressive move in a down market.

Posted on September 20, 2011 at 9:01 am by alexmanzara · Permalink
In: Eurodollar Options

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