Not my circus, not my monkeys
January 27, 2021
–FOMC today. Questions relating to a “financial stability” mandate and macro-prudential tools are likely to pepper the press conference given GME and other stock market acrobatics. Until now, the Fed has gone with the ‘Not my circus…’ line of defense. I sort of doubt that IOER will be tweaked, but the Fed Effective rate was 9 bps all of January until the 21st, when it dropped to 8 and remained there, so there’s been slight deviation from the target midpoint. Fed Fund contracts from February out to June 2022 settled 9993 to 9992.5.
–Not much change in rates yesterday, tens edged slightly lower in yield to 1.038%. In dollars, a seller of 20k EDU1 9981.25/9975 put spread at 1.5, appears to be new shorts in the top strike. Settled 1.5 vs EDU1 9982.0. Buyer of 20k 3EH 9912/9900 put spread for 1, settled there ref EDH4 at 9934. Decent new buying in TYH 138c which settled 11 vs 137-12. 7-year auction today. Durables this morning expected +1.0%.
–Solid results from MSFT yesterday post-close. Today AAPL, FB and TSLA report. With the latter near $900, a good report might be the opportune time for Nancy Pelosi to pitch the March 500 calls she picked up on TSLA in December. We’re all under the big top now.
