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Risk-On Carries On


Late Trade, March Calls


Bounces Off Key Support


Oil Re-Couples With Equities On Lower Omicron Concern

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Rates trade weaker after Fri's closing bell, moderate risk-on tone as equities continued to trade higher (ESZ1 +31.0 at 4460.0, still off early Sep highs of 4525.5).
  • Early weakness as bonds scaled back some of the week's long end support. Tsys continued to trade weaker after early two-way trade after pace of retail sales quickened in September, rising 0.7% when financial markets had expected a decline of 0.2% through the month, the Census Bureau said Friday. August's stronger-than-expected 0.7% increase was revised higher to 0.9%.
  • Continued heavy selling in latter half Eurodollar Whites through Reds, particularly Red Dec'22 -0.075 at 99.31 on over 615k volume -- as sector continues to price in increased rate hike expectations.
  • October Eurodollar serial options expire today -- Massive amount of options (for serials) coming off the sheets: 2,385,140 options, 96% of which are midcurves with put ratio over calls increasing the further out the strip you go.
  • The 2-Yr yield is up 3.7bps at 0.3969%, 5-Yr is up 6.4bps at 1.1141%, 10-Yr is up 6.1bps at 1.572%, and 30-Yr is up 3.6bps at 2.0506%.