Key Takeaways with Craig

CME Group Financial and Commodity markets traded in large ranges once again today as the market continues to assess the potential impact that the sanctions imposed upon Russia could have on prices in different assets. 

  • Equity prices fluctuated earlier in the day, spent most of the day in the red, but rallied into the cash market close to end mixed
  • WTI Crude Oil futures prices were up by about 4.5%
  • US Treasury Yields fell
  • Gold futures price rose by about 1% and was trading over $1,900 again

If we go back 5 years to 2017, current implied volatility at this time of the year is trading near the high levels we’ve seen in nearly all of CME’s asset classes.  From Equities, to Ags to Interest Rates, the options market continues to price in expectations for relatively larger price moves. 

CME’s FedWatch tool, which was showing over a 90% chance for a 50 basis point rate hike at the March FOMC meeting just a couple weeks ago is now pricing in a 93% chance of a 25 basis point hike at that meeting; up from 76% at Friday’s close. 

Finally, CME grains futures markets saw dramatic price increases today as Wheat was up by nearly 9%, Corn by over 5% and Soybeans by nearly 3.5%.  Using QuikStrike, we graphed the implied volatility and price for the April contract going back to 2016.  The bright green line in each graph represents the current (2022) levels and is a nice illustration of just how elevated both measures currently are.  

Today's Future Price Action

Traders Resources

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