Last best day of year to be short?

This could be the last best day of the year to be short Green Eurodollars. The contracts have traded firm earlier today following the as expected nfp. The recovery from the 1 week decline reached near 50%.

The recent high stands out as a indecisive day and longs are likely all to glad to have a chance to pare back. Europe long end has been driving and will continue to support U.S. long-end, but policy rate influenced reds and greens will likely suffer in front of the retail sales report.

The jobs are there at regular +200k now and the household balance sheet is repaired. We need to see households spend. If they are shown to be doing that, economic agents will start to price a steeper post liftoff policy rate.

 

About the Author

Martin McGuire, managing director at TJM Institutional Services

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