Archive for the ‘Eurodollar Options’ Category
Front end pressure
March 18, 2025*****************–Retail sales a bit soft yesterday and Empire State Mfg sank to -20.0 vs -1.9 expected, but front end yields pushed higher. Two-yr up 3.3 bps to 4.05%, while tens were nearly unch’d, with the yield down less than 1 bp to 4.302%. TYM5 settled down 1/32 at 110-19+, while USM5 was +7/32 […]
If you’re long gold, you’re in a deflating world
March 17, 2025*****************–Front end hit Friday as U of Mich inflation expectations showed an unexpected jump. At the end of 2024, year-ahead expectations were just 2.6%, low of the cycle. Just four months later 4.9% (vs 4.3 estimate), nearing the high of 2022 which was 5.4%. Market measures like breakevens (treasury vs inflation-indexed yields) are […]
Canary
March 16, 2025 -Weekly Comment************************************* The inset is a painting ‘The Goldfinch’ by Carel Fabritius in 1654. It features in the 2013 Donna Tartt Pulitzer Prize winning novel of the same name. In the book, the young protagonist Theo Decker is at New York’s Metropolitan Museum of Art with his mother when a bomb explodes. […]
When credit turns
March 14, 2025**************** –New all-time high in gold yesterday and this morning GCJ5 is up over $17/oz just above 3008. GCJ5 settled 2991.30, +44.50. This, despite Schumer’s reversal, which for now, averts the chances of a government shutdown. –Yields fell yesterday as equities continued to decline (SPX -1.4%). Tens down 3.4 bps to 4.276%. Ten-yr […]
Weaker than expected CPI provides no comfort for bonds
March 13, 2025**************** –CPI was a little better than expected with monthly readings of 0.2 both headline and Core. Headline yoy was 2.8 vs expected 3.0 and 3.1 on Core vs 3.2. PPI today. –However, bonds traded weaker on the day, partially due to continued supply. Ten year auction went well with a yield of […]
SFRH5 opts rolling off Friday. Where will SFRM5 be on 13-June opt expiration
March 12, 2025**************** –Despite equity market volatility yields rose yesterday with tens up 7.5 bps to 4.286%. Today brings CPI and 10-yr auction of $39b. CPI expected 0.3 headline and Core with yoy 2.9 (from 3.0) and Core 3.2 (3.3). In February, the ten-yr breakeven (10y yld minus inflation-indexed 10y) hit a high of 247 […]
All about stocks
March 11, 2025****************–SPX fell 2.7% and Nasdaq Comp fell 4.0%. Decline from the highs is of greater magnitude than seen last August (yen-carry scare). Signs of a short-term bounce this morning. –FFN5 settled 9600.5 (+6.0 on the day) or just under 4% vs current EFFR of 4.33%. FOMCs next week (nothing expected) then May 7 […]
Stocks start the week weak
March 10, 2025****************** –Friday’s payroll data was about as expected with NFP 151k and the Unemployment rate up 1/10th to 4.1%. However, U-6 jumped 0.5 to 8.0%. Then year yield rose 2.9 bps to 4.315%. –JOLTS tomorrow expected 7665k from 7600k last. The high in 2022 which preceded peak CPI of 9.1 by a few […]
DETOX
March 9, 2025 – Weekly Comment************************************* They tried to make me go to rehab, but I said “No, no, no”Yes I’ve been black, but when I come back, you’ll know, know, know–Amy Winehouse – Rehab “…the market and the economy have just become hooked; we’ve been addicted to this government spending. And there’s going […]
Payrolls & Powell
March 7, 2025*************** –Payrolls today expected 160k from 143 last. Unemployment rate expected 4.0%, unchanged from last. Powell speech on the Economic Outlook at 12:30. –Midcurve March SOFR options expire in one week. 0QH5 9643.75^ settled 20.25 (ref 9643.5), quite high for a one-week period, but not an easy sale given the backdrop. –Yesterday’s action […]
