Odd

The yield curve tightened up a bit yesterday in a weak fashion. Long dated prices improved a bit on low volume but short rates rose with decent open interest increases and metrics. The debt ceiling influence on Bills is well discussed, here and elsewhere. A string of record low money market sets has failed to better the technical position of front Eurodollars, however. EDZ13 and EDH14 both broke the 10 and 20 day moving averages in a single session of limited movement. Large amounts of new buying in Red Eurodollars has not produced additional price appreciation.

Clearly, participants are itching to sell when the political standoff ends. This thinking comes with an embedded SP jump that may prove short lived when the data begins to flow. The markets are experiencing the worst type of stability. Rarely does that precede "positive" volatility.

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