ber 26Sun d a y, Oc tober 27ay, October 26 Sunday, October 27
ber 26Sun d Date and Time 12/03/2013 16:00 12/04/2013 07:30 12/04/2013 09:00 12/04/2013 09:00 12/5/2013 6:45 12/05/2013 07:30 12/05/2013 07:30 12/06/2013 07:30 12/06/2013 07:30 12/06/2013 07:30
a y, Oc
Event Domestic Vehicle Sales Trade Balance New Home Sales New Home Sales MoM ECB Rate Decision Initial Jobless Claims Continuing Claims Change in Nonfarm Payrolls Unemployment Rate Underemployment Rate
Prior 11.73M -$41.8B --0.25 29-Nov 316K 22-Nov 2776K Nov 204K Nov 7.30% Nov 13.80%
tober 27ay, October 26 Sunday, October 27
Libor Last Price Five day change Libor 1M 0.1655 -0.0015 Libor 2M 0.20505 -0.0032 Libor 3M 0.2376 -0.005 Cash Markets Fed Funds 0.07 0.03 TSY Repo O/N 0.09 0.03 Money Markets USD Swap 2 YR 0.374 -0.0065 USD Swap 5 YR 1.46 0.0218 USD Swap 10 YR 2.819 0.0005 Volatility Vix Index 12.88 -0.81 Commodities Copper Futures 320.55 3.75 Gold Futures 1239.5 -16 WTI Crude Futures 92.28 -1.06 Natural Gas Futures 3.897 0.227 CRB Index 462.84 4.86 Equity Indices SPX Futures 1805.2 27.1 Dow Jones Futures 16065 212 Rig Counts Baker Hughes Gas Count 369 -1 Baker Hughes Crude Count 1387 2 Baker Hughes Oil & Gas 1763 -1 Swap Spread Rates USD Swap Spread 2 YR 8.75 -1.98 USD Swap Spread 5 YR 9.25 0.94 US Treasuries US 10 YR Treasury 2.7391 -0.0407 US 30 YR Treasury 3.8115 -0.0835
Ken Hogan SVP, Head of FX
•
Period Nov Oct Oct Oct
Nader Adeeb VP, FX Trading
Bloomberg FXET: CADB SWIFT: CDBKUS44 [email protected] + 713-871-4061 www.cadencebank.com
•
Goldfinger: LIBOR. FX. Now it’s the London Gold Fix as the world’s center for $33BN/day of gold trading is in the crosshairs of UK regulators. Twice daily since 1919, the fix, which sets the global benchmark for pricing gold products and derivatives, has been set on a call with five banks (Barclays, Deutsche, Scotia, HSBC, SocGen). While the call allows bank clients to anonymously buy/sell large amounts to determine the fix, authorities say traders at these banks simultaneously use and disseminate this information inappropriately. We wonder, will regulators crackdown on opaque markets like Butter and Osaka Frozen Shrimp futures next?
Too Old to Fail: Banca Monte dei Paschi (MPS), Italy’s oldest and 3rd largest bank, clinched EU approval for a €3.9BN bailout and €13BN in state guarantees. MPS sought government help after racking up substantial losses from wrong-way bets on Italian sovereign debt between 2009 and 2011. Apparently, in a move eerily reminiscent to Baring’s Nick Leeson, MPS lost €7.9BN after trying to obscure more than €700 million in losses by structuring exotic derivatives deals. Clearly, it would have been much cheaper (and ethical) to simply take the loss and disclose it. This is a textbook case of why all the old traders say to take your lumps and drive on!
•
One Way Bet: Sensing further weakness ahead for the Japanese Yen, traders have accumulated the largest net-short yen futures position against the USD since July 2007. Although most economists anticipate little movement in USD/JPY for 2014, traders disagree given that Japan has resorted to an unprecedented $70BN of monthly bond purchases since April to: 1) depreciate its currency; 2) boost growth; and 3) combat deflation. In response, the JPY has plunged by 15% against the USD this year and is on pace for its largest drop since 1979. Interestingly, it is estimated the George Soros made almost $1BN on his short-yen position. Long and wrong?
•
Geopolitical Risk: The Iran Accord will offer about $7BN in “targeted relief” from sanctions and allows the EU to lift the insurance ban on tankers moving Iranian oil. This really shook up markets on Monday morning. What’s a few hundred thousand barrels of oil per day really worth? Not much, but enough to cause a 2% drop in Brent Crude after rallying for three consecutive days last week. Although noteworthy, Brent’s decline was not as startling as the Ruble’s, which violently shed 3% against the USD upon announcement. Given that Brent Crude is Russia’s second largest export, this is not Ruble-positive. Note the swift reaction in USD/RUB:
a y, Oc
Event Domestic Vehicle Sales Trade Balance New Home Sales New Home Sales MoM ECB Rate Decision Initial Jobless Claims Continuing Claims Change in Nonfarm Payrolls Unemployment Rate Underemployment Rate
Prior 11.73M -$41.8B --0.25 29-Nov 316K 22-Nov 2776K Nov 204K Nov 7.30% Nov 13.80%
tober 27ay, October 26 Sunday, October 27
Libor Last Price Five day change Libor 1M 0.1655 -0.0015 Libor 2M 0.20505 -0.0032 Libor 3M 0.2376 -0.005 Cash Markets Fed Funds 0.07 0.03 TSY Repo O/N 0.09 0.03 Money Markets USD Swap 2 YR 0.374 -0.0065 USD Swap 5 YR 1.46 0.0218 USD Swap 10 YR 2.819 0.0005 Volatility Vix Index 12.88 -0.81 Commodities Copper Futures 320.55 3.75 Gold Futures 1239.5 -16 WTI Crude Futures 92.28 -1.06 Natural Gas Futures 3.897 0.227 CRB Index 462.84 4.86 Equity Indices SPX Futures 1805.2 27.1 Dow Jones Futures 16065 212 Rig Counts Baker Hughes Gas Count 369 -1 Baker Hughes Crude Count 1387 2 Baker Hughes Oil & Gas 1763 -1 Swap Spread Rates USD Swap Spread 2 YR 8.75 -1.98 USD Swap Spread 5 YR 9.25 0.94 US Treasuries US 10 YR Treasury 2.7391 -0.0407 US 30 YR Treasury 3.8115 -0.0835
Ken Hogan SVP, Head of FX
•
Period Nov Oct Oct Oct
Nader Adeeb VP, FX Trading
Bloomberg FXET: CADB SWIFT: CDBKUS44 [email protected] + 713-871-4061 www.cadencebank.com
•
Goldfinger: LIBOR. FX. Now it’s the London Gold Fix as the world’s center for $33BN/day of gold trading is in the crosshairs of UK regulators. Twice daily since 1919, the fix, which sets the global benchmark for pricing gold products and derivatives, has been set on a call with five banks (Barclays, Deutsche, Scotia, HSBC, SocGen). While the call allows bank clients to anonymously buy/sell large amounts to determine the fix, authorities say traders at these banks simultaneously use and disseminate this information inappropriately. We wonder, will regulators crackdown on opaque markets like Butter and Osaka Frozen Shrimp futures next?
Too Old to Fail: Banca Monte dei Paschi (MPS), Italy’s oldest and 3rd largest bank, clinched EU approval for a €3.9BN bailout and €13BN in state guarantees. MPS sought government help after racking up substantial losses from wrong-way bets on Italian sovereign debt between 2009 and 2011. Apparently, in a move eerily reminiscent to Baring’s Nick Leeson, MPS lost €7.9BN after trying to obscure more than €700 million in losses by structuring exotic derivatives deals. Clearly, it would have been much cheaper (and ethical) to simply take the loss and disclose it. This is a textbook case of why all the old traders say to take your lumps and drive on!
•
One Way Bet: Sensing further weakness ahead for the Japanese Yen, traders have accumulated the largest net-short yen futures position against the USD since July 2007. Although most economists anticipate little movement in USD/JPY for 2014, traders disagree given that Japan has resorted to an unprecedented $70BN of monthly bond purchases since April to: 1) depreciate its currency; 2) boost growth; and 3) combat deflation. In response, the JPY has plunged by 15% against the USD this year and is on pace for its largest drop since 1979. Interestingly, it is estimated the George Soros made almost $1BN on his short-yen position. Long and wrong?
•
Geopolitical Risk: The Iran Accord will offer about $7BN in “targeted relief” from sanctions and allows the EU to lift the insurance ban on tankers moving Iranian oil. This really shook up markets on Monday morning. What’s a few hundred thousand barrels of oil per day really worth? Not much, but enough to cause a 2% drop in Brent Crude after rallying for three consecutive days last week. Although noteworthy, Brent’s decline was not as startling as the Ruble’s, which violently shed 3% against the USD upon announcement. Given that Brent Crude is Russia’s second largest export, this is not Ruble-positive. Note the swift reaction in USD/RUB:
