It’ll NEVER happen
April 25, 2024
***************
–It used to be a regular question: “What’s the lowest strike call I can buy for 0.25 on the near euro$ contract?” Yesterday someone paid 0.25 for 30k SFRK4 9675c. That’s over 200 bps away with 15 days until expiration (SFRM4 settled 9473.5). Might as well be on a euro$ because it’s a fantasy trade. On the other hand, if this strike starts to make the shorts nervous, then we ALL have to be scared shitless about the state of the world. On a much more mundane level, buyer of 25k SFRU4 9600c 4.25 to 4.5 (4.25s vs 9490.5) and buyer of 12k SFRZ4 9600/9700cs for 6.0, which is where it settled vs 9508.5.
–Speaking of large moves, META took a dump on earnings, down 15% after hours, an evaporation of $180 billion or so in market cap. MSFT and GOOGL today.
–Rates were up yesterday as the market digested the five-yr auction; 7s today. Ten year yield up 5.6 bps to 4.652%. The ten-yr tip ended at 2.24%, a pretty juicy real yield. Of course, part of the return comes from CPI, which means you’re at the mercy of a disgruntled employee working in the basement of the BLS with a red swingline stapler (and a large data base). One day he’s working on payroll number revisions (see below), and the next day on CPI. Last October the high yield on 10y tip was around 2.5%. On the SOFR strip reds were down 4.5 and greens -5.375.
–Aside from the 7yr, Q1 GDP is released. Yesterday’s Atlanta Fed GDP Now was 2.7% while the NY Fed”s Nowcast is 2.23%. Expected 2.3 to 2.5%. Jobless Claims expected 212k, as the needle seems to be stuck there, no matter how many companies announce layoffs. BOJ announcement tonight. PCE prices tomorrow.
–Here’s a link to revisions in payrolls, released yesterday (thanks HB)
From June 2023 to September 2023, gross job losses from closing and contracting private-sector establishments were 7.8 million, a decrease of 37,000 jobs from the previous quarter, the U.S. Bureau of Labor Statistics reported today.
https://www.bls.gov/news.release/cewbd.nr0.htm\
–And here’s an interesting tweet linking yen weakness to the property crash in China, (preceded by a butterfly flapping its wings in Santa Fe, NM).
And here’s a bonus clip
