Key Takeaways with Craig

Once again, due to scheduling, we are writing the Key Takeaways column with about an hour and a half left in today's cash equity trading session.. in fact, we're writing from Toronto, Ontario, where we're enjoying balmy 33 degree spring break temperatures.  

As we near the end of the trading session, US Equities are broadly higher for the second day in a row as the market seems to place more emphasis on optimism about the ongoing Russia-Ukraine talks than any fears it might have about the near inversion of the 2-Year and 10-Year Treasury yields.  In fact, the Micro 2-Year Treasury Yield futures is trading just under one basis point from the Micro 10-Year Treasury Yield.  It's a metric we've been watching over the last several weeks here in the Key Takeaways section as the US Treasury Yield Curve has flattened, as an inversion of those rates has oftentimes preceded a recession.  

WTI Crude Oil, CME Grains and Gold futures prices all fell today, perhaps also as a reaction to Ukraine-Russia negotiations.  

The options market has reacted to these price moves with lower implied volatility.  CME Group Equity Index options are trading at implied volatility levels we haven't seen since mid-January.  WTI Crude OIl options implied volatility, while still elevated, is trading under a one standard deviation move relative to the last three months and Gold implied is trading right around its 3 month average closing level.  

As we look ahead to the rest of the week, we've got the March Employment numbers set to be released on Friday which will be another indication of the strength of the US Economy.  While it's difficult to isolate what factors might be leading to increased implied volatility with so much going on, as you can see in the blue line in the QuikStrike graph below of the implied volatility curve in E-mini S&P 500 options, the options market is assigning a slightly elevated implied level to the Friday expiration than the more deferred expiries.  

Today's Future Price Action

Traders Resources

The information in the market commentaries have been obtained from sources believed to be reliable, but we do not guarantee its accuracy and expressly disclaim all liability. Neither the information nor any opinions expressed therein constitutes a solicitation of the purchase or sale of any futures or options contracts. The information on this site compiled by CME Group is for general purposes only. All information and data herein is provided as-is. Additionally, all examples on this site are hypothetical situations, used for explanation purposes only, and should not be considered investment advice or the results of actual market experience. CME Group assumes no responsibility for any errors or omissions. CME Group, its affiliates and any third party information and content providers expressly disclaim all liability with respect to the information and data contained herein including without limitation, any liability with respect to the accuracy or completeness of any data. You use the data herein solely at your own risk. All data and information provided herein is not intended for trading purposes or for trading advice. All matters pertaining to rules and specifications herein are made subject to and superseded by official CME, CBOT, NYMEX and COMEX rules. Current rules should be consulted in all cases concerning contract specifications.

Neither futures trading nor swaps trading are suitable for all investors, and each involves the risk of loss. Due to the leveraged nature of futures trading and swaps trading, it is possible to lose more than the amount deposited in a position. Therefore, traders should not deposit more funds than they can afford to lose without negatively affecting their lifestyles. A trader cannot expect to profit on each trade, and should only devote a small amount of their available funds to each trade. All references to options refer to options on futures.

Past performance is not necessarily indicative of future performance.

CME Group, the Globe Logo, Chicago Mercantile Exchange, Globex and CME are trademarks of Chicago Mercantile Exchange Inc. CBOT is the trademark of the Board of Trade of the City of Chicago, Inc. NYMEX is the trademark of the New York Mercantile Exchange, Inc. COMEX is a trademark of Commodity Exchange, Inc. All other marks are the property of their respective owners. Each of Chicago Mercantile Exchange Inc. (ARBN 103 432 391), The Board of Trade of the City of Chicago Inc (ARBN 110 594 459), the New York Mercantile Exchange Inc (ARBN 113 929 436) and Commodity Exchange, Inc. (ARBN 622 016 193) is a registered foreign company in Australia and holds an Australian market licence.

This site does not constitute a prospectus, product disclosure statement or legal advice, nor is it a recommendation to buy, sell or retain any specific investment or to utilise or refrain from utilising any particular service. Readers should consult their legal advisors for legal advice in connection with the matters covered on this site.

CME Group is the world’s leading derivatives marketplace. The company is comprised of four Designated Contract Markets (DCMs). 
Further information on each exchange's rules and product listings can be found by clicking on the links to CME, CBOT, NYMEX and COMEX.

© 2024 CME Group Inc. All rights reserved.