Sept 3. NFP
Sept 3. Employment data today. NFP expected -105k with Private payrolls +40k. Midcurve options are priced as if there’s not much chance of a large move, but I think that’s wrong. Good buyer of EOU 9925p for 3.5 and today’s 9925 p for just 1.5 when EDU1 was trading 99.295. Midcurve 9925^ settled 10.5.
–Non-mfg ISM expected 53.2.
–“…but financial issues can have security issues and therefore we keep an eye on them,” [General] Petraeus said. …Oh whew…he was talking about a bank run in Afghanistan, not something here.
–Washington Post has an article on Obama team’s stimulus proposal, which leans towards business tax credits to spur hiring and an R&D tax break.
–A weak number will certainly cause a bond rally, but I don’t think it would be likely to hold. It could be one of those days where the market surges higher and then breaks viciously. 2/10 treasury spread just doesn’t want to stay near 200, especially with a new QE round looking less likely.
