This one read well from today’s FT – and I quote; “ Imagine what the world’s monetary policy would be if the People’s Bank of China, rather the US federal Reserve, set the global agenda. Then the number one goal would not be to help an already rich country recover from hangover caused by a binge of house building and borrowing. Instead, it would be to push commodity prices down towards the cost of production. The current commodity boom increases the risk of both social unrest and an inflationary spiral in China, where food and fuel account for almost half of consumer spending.” The article points out that nothing will be changing anytime soon and I would concur with that for at least the next 3 years and perhaps longer.
Fixed income remains firm as measured by 10yr. and 30yr. futures – so long positions still warranted. Short end saw mega trade on a Dec. 90/92/95 put fly. Fed Fund options saw a number of resting bids for put flys get filled as futures prices ticked up – likely in response to the language of extended period remaining and no imminent moves to change were signaled yesterday.
Larger flows from a.m. session listed below:
| 4/28/2011 | |||||
| Pre open screen | |||||
| Paper | B | 75,000 | EDZ1 90/92/95 p flys | 2 | 9955 area |
| Floor | |||||
| Paper | B | 15,000 | EDZ1 90/92/95 p flys | 2 | 9955 area |
| Paper | B | 2,000 | EDH85/90 p spread | 2 | 9940.5/41 |
| Paper | S | 2,000 | EOU 75/80 pspread | 3.5 | 9983.5/84 |
| TJM | B | 2,000 | EDH2 9712/9775 ps | 1 | 9940/40.5 |
| Paper | S | 5,000 | EOM 91/92 p spread | 7 | ^9916 |
| Paper | B | 35,000 | EDU13 65/67 p spread | 2.5 | 9769/69.5 |
| Fed fund opts | |||||
| 1st op | B | 2,000 | FFZ 9968/9975/9981 p fly | 0.75 | 9977/77.5 |
| 1st op | B | 100 | FFG9937/9950/9962 p fly | 1.5 | 9969/69.5 |
| Trade link | S | 100 | FFG9937/9950/9962 p fly | 1.5 | 9969/69.5 |
| 1st op | B | 3,000 | FFZ9956/9962/9968 p fly | 0.25 | 9977/77.5 |
| Trade link | S | 1,000 | FFZ9943/9950/9956 p fly | 0.25 | 9977/77.5 |
| Trade link | B | 1,000 | FFZ9981/9987 c sprd | 3.25 | 9977/77.5 |
| Trade link | S | 1,000 | FFZ9981/9987 c sprd | 3.25 | 9977/77.5 |
| Trade link | S | 2,500 | FFZ9956/9962/9968 p fly | 0.25 | 9977/77.5 |
| Trade link | S | 1,000 | FFZ 999968/9975/9981 pfly | 0.75 | 9977/77.5 |
| Paper | B/S | 2,000 | FFZ 9943/9950/9962 p fly | 0.25 | |
| 10yr. Opts | |||||
| Paper | B | 2,000 | TYM119/119.5/120.5 p tree | 0.09 | 12031.5/00 |
| Smith B | S | 1,000 | TYM 121/121.5 c spread | 0.14 | 12030/30.5 |
| Locals | B/S | 1,500 | TYM119/119.5 p spred | 0.05 | ^12030.5 |
| Mann | B | 1,500 | TYM122c | 0.18 | 12029/29.5 |
| JP Morg | B | 5,000 | TYM119/122.5 combo | .01 call over | ^12029 - 38% |
| Paper | B | 1,000 | TYM120.5 p | 0.29 | 12101.5/02 |
| RJO | B | 1,500 | TYM121 strads | 1.23 and 1.24 | 12100.5/01 |
Hallo, does FEDs POMO purchasing of treasuries have any impact on treasury prices?
Thank you for your answer.
Regards
Tomas
Posted by: Tomas | 04/28/2011 at 12:21 PM