Earlier in the day, US Equities were down sharply, presumably due to continuing inflation fears and rising longer term Treasury yields that we’ve written about here in the Key Takeaways section recently. However, later in the trading session, Federal Reserve Chairman Jerome Powell, in remarks to Congress, assuaged some of those fears with dovish interest rate comments and the US equity markets turned mixed.
Net price changes in many CME Group products on the day were fairly muted though Platinum futures prices were down about 3% while Copper rose gain, up another 1.5%. Bitcoin futures prices, after the recent, well-publicized rally, were down by about 14% today to about 46,000 in the February contract. With today’s move in Bitcoin futures prices, we saw implied volatility rise back to almost 125%.
Even though we covered it Friday, we thought it was worth showing another price and volatility graph for Copper. As you can see in the QuikStrike image below of 6 months of copper data, both price and implied volatility are extraordinarily high relative to where they’ve been over the past six months. Remember, copper tends to be sensitive to industrial demand and the “re-opening” trade that has been in the headlines lately.
Also, I’d like to quickly follow up on yesterday’s write up on the WTI Crude Oil – RBOB Gasoline “crack” spread. I failed to mention that CME Group lists these contracts as spreads on its central match engine Globex. Therefore, if you wanted to gain exposure to this spread, you could execute it in one transaction. For example, at the time of this writing, the April RBOB/WTI spread is quoted at 19.92 bid @ 19.94 offer such that if you bought this spread you would assume a long position in April RBOB and short position in April WTI Crude Oil in one execution.