Daily Market Recap: 12.27.2010
The S+P traded in a 7 point range, closing small up on the day.
Financials did the best, up almost 1%, on the back of the news that AIG
received $4.3bn in bank credit lines. Not surprisingly, today was the
lightest day of the year in terms of volumes.
The VIX was up 1.2 to 17.67.
FX, everything traded in a tight range. The USD closed small down on
the day but barely moved during the NY session. Same story in USDJPY
which traded in a 33 pip range all day. The GBP underperformed modestly
on the day although it seems silly to try to spin too grandiose a story
as to why. Tomorrow should be better as NY slowly starts to dig itself
out from the storm.
The ratesmarket was relatively exciting,
finishing 1 to 7bps firmer on a bull flattening move led by the back
end. Liquidity was very thin but we saw good buying from the real money
community. The $35bn 2yr auction went better than expected, clearing
at 74bps (1.6bps through)and the market rallied into the close.
In other interest rate news, the central bank of Israel left rates unchanged at 2.00%, in-line with expectations.
Credit indices inched lower today with the price of HY dropping by 1/16 to close at 102.5625 and IG closing unchanged at 83.50.
commodities, crude fell 0.51 to $91/ barrel on renewed concerns that
China’s economy is overheating post the rate hike news over the
weekend. In metals, we saw modest gains across the board with the
exception of silver which dropped 0.30%. Gold continues to trade in a
very tight range closing at 1383.85, up a modest 0.2% on the day.
case you missed it, here is our bottom line on the Dallas Fed: “The
Dallas Fed's survey of manufacturers in Texas showed a modest slowing in
the growth rate of business conditions, but at +12.8 it was still in
positive territory in December. The production index stayed almost
steady, at +12.8 vs. +13.1; the index for growth in new orders slowed to
+1.6 from +9.1, and the index of employees shot up to +15.0 from +5.8.
With the growth of orders slowing, significantly, this has to be read as
somewhat softer than the deceleration in the headline suggests.”
brings the Case Shiller home price data, the Richmond Fed Survey, US
consumer confidence, revised GDP for France, and retail sales for
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