Key Takeaways with Craig

Once again, US Equity prices struggled to find a clear direction as the market continues to weigh inflation, interest rates and recession fears, among other issues.  Ultimately, stock prices wound up mixed with relatively small net changes on the day.  Implied volatility in CME’s Equity Index options markets was, similarly, little changed today.

US Treasury yields declined according to CME’s Micro Treasury Yield futures contracts.  The 2-Year Micro Yield was down by about 6.5 basis points while the Micro 10-Year Yield was down by about 11 basis points.  The much-watched difference between these two treasury yields was trading at about 3.5 basis points according to the Micro futures contracts (2-Year Yield 3.058 and 10-Year Yield 3.092). 

We used CME Micro Treasury Yield settlement prices to graph the yield curve from June 1st (Blue) June 15th (Orange) and Today (Gray).  As you can see, at the beginning of this month, the US Treasury yields were both lower and the curve had a more “normal” (not inverted) shape.  By the mid-point of June, yields had risen and the yield curve had flattened and today, the curve remains flat, though yields have come down over the last couple weeks.

Please check out the Yield Insights video by Jim Iuorio in the video section of today’s newsletter for some trade examples using the Micro Treasury Yield futures contracts.    

Today's Future Price Action

Traders Resources

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