What the binary options market looks like …
As of 7:19 pm EST, the NADEX offered the following binary options contracts for the EUR/USD expiring this Friday (23 May 2025) at 3 pm:
Contract closing above 1.1225. Buy at $9.50
Contract closing above 1.1175. Buy at $9.90
Contract closing above 1.1125. Buy at $7.70
I calculated a forward price for EUR/USD for this Friday at $1.1183.
The spot price or the EUR/USD at 4:15 pm was 1.1318.
Fiscal pressure on the US dollar and the political shenanigans …
Reuters reports that worries about a Trump tax cut and spending bill and a weak 20-year Treasury bond sale have exacerbated the “Sell America” trade I discussed in my post earlier this morning. Members of Congress tend to head out of DC on Thursdays and a holiday on Monday is added incentive to skedaddle.
I don’t see Speaker of the House Mike Johnson and President Trump meeting in the middle for a come to Jesus moment over fiscal policy. The President has acknowledged that his trade policy would be tough going in the early run and probably feels that way about his fiscal spending desires.
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The President is a lame duck. In my opinion, he has been a lame duck since 30 April so he just might believe he has nothing to lose in terms of political capital. He has Congress in the bad cop position with Congressional Republicans balking at the spending package. My sense is the President would rather keep his focus on foreign affairs where he can skirt domestic issues.
Alton Drew
21 May 2025
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