You’re Fired!
June 28, 2024
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–You’re Fired… I’m talking, of course, about Masato Kanda, Japan’s currency diplomat, who has presided over yen depreciation, with $/yen breaching 161 today. I only watched a couple of minutes of the US presidential debate, but got a sense of it from this morning’s headlines:
Reuters: Biden’s Wobbly Debate
BBG: Biden’s Disastrous Debate
FT: Democrat’s Panic as Biden Stumbles
WSJ: Dem’s Discuss Replacing Biden
NYT: Biden Struggles
Chgo Trib: …a raspy and sometimes halting Biden tries to confront Trump… [charitable]
So we’ll see who the new guy/person is at the convention, I suppose.
The market tentatively is pricing a Trump win; stocks up, bonds a bit weaker. But oil is at a new recent high this morning with CLQ4 82.43.
–Yesterday was quiet. Ten year yield slipped back a few bps to 4.286%. Early buys of 15k SFRZ4 9525/9550/9600/9700c condor 2.5 and 9525/9575/9600/9700cc for 5.75…looks like they’re rolling long 9600/9700 c sprds into tighter, closer to the money call spreads. Indeed, open interest confirms that, with a drop of 37k on 9600c and 44k in 9700c, and of course, a jump of 29k in the 9525c. SFRZ4 settled 9514, so the new lower strike is just 11 otm, but with the Fed Fund Effective at 5.33% or 9467, the 9525 strike needs two to three eases to be in play. Of course, Powell could be out, replaced with a financial wizard like Sam Bankman Fried who can get us back to 1% funding rates…
–Capital Goods Orders non Def, ex-Air was -0.6%; weak.
Today brings PCE prices expected 0.0 with Core 0.1% on month/month.
Y/y expected 2.6 and 2.6%.
