Futures Curve by Accutic

Treasury Trading Update.

Stress - driving the Euro currency to new monthly lows and treasury yields close to those levels.

From today's accutic plus report:

Dollar funding is very critical flashing red in an extreme manner. Euro vs. the dollar in the currency market is trading new monthly lows (see chart right) – have to go back to Jan of this year which is very much in range 128.70 area.

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Treasury Trading Update.

Could the Fed pipe up a bit about QEIII as some have conjectured today - absolutely and here is why.

From todays accutic plus report:

If the dollar is a consideration in the Feds thinking then they could very well justify stepping up the hints of QEIII now because the dollar is right about at the level it was back when QEII was launched end of Nov. 2010…

Good activity in ED options today and and volatility was being sold accross the curve in the early going - for update on flows and some interesting charts members log in here. http://financialfutures.typepad.com/accutic_plus/

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Treasury Trading Update.

There were some tragic events that occurred at last weeks Summit. To elaborate a bit -  what is tragic is that when there is an opportunity for progress to be made - for success to be obtained it does not occur for one reason. Human ego in all it's pathetic splendor - the breeding ground of sabotage by self and by others.

From today's accutc plus report:

The main problem being that if the 17 Euro zone members plus most but not all of the balance of EU members choose to take action on the proposals submitted – they may not be allowed to operate legally with in the structure of the existing E.U. institutions.

Currently the markets are reflecting this by the Euro currency trading near the October 4^th low of 131.42 to the dollar. Back then the world was waiting for Slovakia to get on board with proposals to leverage the EFSF – eventually they did sign on ...

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Treasury Trading Update.

No explosions from the EU Summit however stress indicators are showing resumption of - you guessed it - stress.

From today's accutic plus report:

Price action as measured by US 10yr. note futures show that there may have been a bit of hope that something rather substantial would have come out of the EU Summit concluding today. However as shown on the chart to the right the trend towards lower prices since that started around Nov 29^th may be ending. Back then I noted how the IMF was started to be mentioned as taking more of a significant role in the European crisis - http://financialfutures.typepad.com/accutic_plus/2011/11/treasury-trading-update-15.html

 although not “the bazooka” at least including them took the caliber from pistol to long bore rifle size.

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Treasury Trading Update

Seeing a sustained bid in treasuries at the midpoint of todays session. Traders no doubt will want to hold exposure in case a serious event comes out of the EU summit later today or tomorrow.

From today's accutic report:

As we approach the summit the R- word is the one to watch out for. R for referendum which is a thinly veiled threat held primarily by the UK and a bit less so by Ireland and perhaps others.

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Treasury Trading Update.

New facilities from the ECB help alleviate a little bit of funding pressure however the Libor setting continues to trend higher.

From today's accutic plus report:

Also fascinating this morning has been the uptick in Eurodollar futures. There was strong participation in the 84 day facility provided by the ECB 50 bln. euro’s worth. This is one of the new facilities the ECB introduced to allow banks to fund themselves for longer periods of time – which clearly removes the stigma associated with having to show up at the one week facility week after week after week after wee – etc. Activity in the Eurodollar options clearly reflecting this and volume is even more robust today than yesterday’s activity which was more on the bearish side.

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Treasury Trading Update.

The risk of failure at this Fridays EU summit were a bit more on traders minds in today's session. There was noticably more activity in Eurodollar options this morning. I suspect this trend will continue tomorrow.

For more on this story and update on flows members log in here: http://financialfutures.typepad.com/accutic_plus/

From today's accutic plus report:

With the ratings agencies weighing in and applying additional (probably unnecessary) pressure – and kind of blow up and concerns raised - that the EU is doomed would likely see funding problems flare up significantly. Players list below shows some trades – especially in the more deferred months.

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Treasury Trading Update.

Very slow pace today - as market will probably start widing up a bit more as we get closer to Friday's all important EU summit.

We did get a little movement from Merkel and Sarkozy's press conference:

From today's accutic plus report - A couple of comments from Merkel and Sarkozy just came out initially they said the both had penned an agreement working out their differences and will be presenting this document to Van Rumpoy on Wednesday. This seemed to increase risk appetite (see chart right) a bit and the Eurocurrency moved up. However they also agreed that Eurobonds are not the solution. So far the bid as measured by the Euro currency has sustained itself.

Currently 9:50 a.m.c.s.t. and euro currency giving up some of the gains scored off the press conference comments. For more and update on flows members can log in here: http://financialfutures.typepad.com/accutic_plus/

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Treasury Trading Update

From today's Accutic Plus Report:

Good afternoon folks – an interesting enough day I suppose. Non farm payrolls came out as expected around 120K or so – but the unemployment rate dropped to 8.6% - which of course was due mainly to people dropping out of the labor force and by no means finding employment. The initial shock of a drop of .4 from the previous read was enough to give the 10yr. futures a quick shove lower. As the players list below activity was fairly subdued prior to the data release. Most the flow ensued after the sharp selloff had corrected and prices were trading just below 12900. Chart right shows the magnitude of the move down and the current move up as we are more than halfway through the session now.

 

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Treasury Trading Update.

Long rates recently traded as low as 2.69% and then we had yesterdays intervention to see what that means interms of Treasury trading members should log in here http://financialfutures.typepad.com/accutic_plus/

Also from today's accutic plus report

Make a note on your calendars to tune in via the internet to the senate agriculture hearings that will feature the latest Wall Street villain – John Corzine, will be questioned. This is scheduled for Dec. 13.

Currently price action is heading lower staying with recent trend change noted. Just prior to yesterdays liquidity facilitation announcement.

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