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*** GS' Blankfein earlier in.....>

US EURODLR OPTIONS
US EURODLR OPTIONS: *** GS' Blankfein earlier in yr, now JP Morgan's Dimon
overnight heralding (or warning) 4% 10Y yield is coming. The eye-catching quote
gained traction as Tsys sell-off in face of ongoing mid-East tensions (US Pres
Trump exp to make annc over Iran today at 1400ET). Surging US$ to late Dec'17
highs (DXY 92.380h) adds to rising ylds (10YY taps 2.9797H vs. 3.03% high from
Apr 25) and pressuring EM. MUFG's director/rates strategist John Herman posits
it would "take a near miraculous economy to get to 4%". "So many things 'have to
go right'" Herman said, just to get 10YY to 3.45%, such as Reps maintain/enhance
majorities in House/Senate, Pres Trump is NOT impeached, Reps "vote to commence
"Phase Two" of economic stimulus", biz & consumer sentiment remains near 40Y
highs, biz "involuntary layoffs make NEW LOWS" while "JOLTS Job Openings make
new ALL-TIME HIGHS", "household formation/home ownership rates strengthen" while
eco-slack is "greatly reduced". Herman expects further flattening in 2s10s.
Flipside, Academy Securities Glen Capelo notes buy-strike from domestic/central
banks, sov'n wealth funds, tech giants in face of increased Tsy supply, "throw
in ECB tapering...and you have a Bond Selling Party."

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