Treasury Trading Update

As you know I have been focused on commodity prices and the need to watch them more than the government statistics. This article shows how some in Europe are of a similar view. The rest of the article is quite good as well highlighting the danger being created by the nasty little pricks trading cds on the “club med countries”.

“However, his boss, ECB chief Jean “Tricky” Trichet, is strongly opposed to lifting interest rates any time soon, arguing that inflation is dead. “We have inflation under control and that’s the reason why I have said on behalf of the governing council that interest rates are appropriate,” Trichet said on April 26th. “Raising interest rates too soon would crush the green shoots of recovery,” added Austrian central bank Ewald Nowotny. ECB officials are pointing to phony inflation statistics massaged by bureaucrats, and not viewing commodity inflation that is galloping ahead. “ Here is the link to the full article – it is very good and informative. http://www.financialsense.com/Market/wrapup.htm .

In our markets treasury volume was decent at about 1,500,000, the open interest declined slightly as prices were whipsawed a bit by down grades to Spain. Ransquawk by the way issued a very handy chart yesterday that showed the current ratings of most Euro zone countries and explained how the ratings worked in terms of qualifying for borrowing status. If you do not have one you may email me at tompthp@cs.com and I can make sure you get one. Not too much more to add at this time, and again Gary Dorsch article highlighted above should suffice for now in terms of a broad perspective.

Players in options listed below.

10yr.
197	Sold	500	M 19+/20 C SPD	3	11712/12+
092	Sold	1000	M13/15P SPD	7	11711/11+
660	Sold	2000	N 17C	45	11710/10+
714	Bot	10000	M15+/17+P SPD	41/44	11709+/10
287	Bot	2000	M121C	2	11708/09
714	Bot	500	M 15/17P 1X2	21	11709/09+
197	Sold	2500	M 13P	3	11705/05+
685	Bot	600	M 15/17P 1X2	22	11706/06+
350	Bot	3000	+M16+P/-18+C COMBO	11	11709+
LOCAL	Bot	1000	M 15+/17+P SPD	43	11706+
714	Bot	500	M14+/16P 1X2	7	11708/08+
714	Bot	2000	M14+/16+P 1X2	22	11710
275	Bot	600	M14+/16P SPD	13	11712
685	Bot	2000	M 16P	20	11710+/11+
370	Sold	3000	M 15/18 STG	38	11710+/11
197	Bot	500	N 18C	26	11711
685	Sold	2000	N 16^	220	11710/11
444	Bot	1000	M 121C	2	11708+/09
197	Bot	1000	M 121C	2	11708+/09
560	Bot	4000	+N14P/-U12P DIAL	1	11704/04+
LOCAL	B/S	700	M14/20 COMBO	1	11707
714	Sold	500	M 17^	134	11705/05+
685	Bot	500	M 16P	23	11703
30yr.
560	Sold	3000	M 16P	31/30	11728
560	Sold	3000	M 16C	224/222	11728
560	Bot	2000	M 18C	106	11728
560	Bot	5000	M 115/121 COMBO	P 4	11800/11731
660	Sold	2000	FLEX 11715P EXP TODAY	3/4	11724/25
560	Bot	2000	U 109/114p 1x2	36	U11620
2 + 5yr.
560	Bot	2000	M 14/15+ C SPD	31.5
370	Bot	1500	M 15P	23.5
287	Bot	1000	TU  M108.7/109 C SPD	6
714	Sold	500	TU M 108.7C	9
Fed Fund
915	Bot	500	K 62/M68P DIAL	.50
287	Sold	500	K 62/M68P DIAL	.50
714	Sold	2000/1000	F+62/75c X-50/56p Stupid 2x1	1.5/2
690	Bot	500/1000	X+50/56p Stupid F-62/75c 1x2	1.5/2
915	Bot	250/500	X+50/56p Stupid F-62/75c 1x2	1.5
690	Bot	2250	Z68c	5	Z9955+-56
690	Sold	2500	Z68c	5	Z9955+-56
287	Bot	1500	X 00/25/50 p fly	3	9961/61+
714	Sold	250	Z68c	5	Z9955+-56
915	Bot	1250	Z68c	5	Z9955+-56
714	Sold	1000	K 81^	3.25	K9978/78+
690	Sold	750	Z68/75c 1x2	2	Z9955+-56
685	Bot	5000	K75p	.75	K9978/78+
690	Bot	1000	K81 Stdl	3.25	K9978/78+
690	Sold	3000	Z-56/62/68p Fly F+62/68c Z-62/68c	.50
690	Bot	1000	Z+56/62/68p Fly Z+62/68c F-62/68c	.50
915	Bot	500	Z+56/62/68p Fly Z+62/68c F-62/68c	.50
385	Bot	1000	K62p	.25	K9978/78+
690	Sold	500	N 50P	.75	N9974+/75
815	Sold	500	N50P	.75	N9974+/75
915	Bot	1000	N 50P	.75	N9974+/75
690	Sold	1500	Z56/62/68C FLY WITH F 62/68/75 C FLY	.75
690	Bot	1500	Z56/62/68C FLY WITH F 62/68/75 C FLY	.75
690	Sold	500	-Z 56/62 C SPD +F62/68 C SPD	.50
287	Sold	2000	U 75p	5/4.5
690	Sold	500	-C  K68P/81C COMBO	EVEN	K9978/78+