Key Takeaways with Craig
US Equity prices began the day lower and pretty much stayed there throughout as the market looks toward the FOMC announcement on its Fed Funds target scheduled for tomorrow afternoon. US Treasury yields were nearly unchanged today as traders in those markets will also watching for the FOMC announcement and accompanying statement. As we pointed out yesterday, implied volatility in tomorrow’s expiry in both the Treasury and Equity Index options remains significantly above the more deferred contract months, underscoring the market moving potential of the FOMC decision.
Commodity markets were active at CME with
- CME grains futures prices higher
- WTI Crude Oil futures prices lower by about 1.5%
- And Natural Gas futures prices rising again, though finishing below earlier high levels.
Despite coming off of earlier highs, Nat Gas futures prices are approaching recent (and historically) high levels as you can see in the orange line in the QuikStrike graph below which shows the last year of price and volatility data in Nat Gas. This move hasn’t been lost on the options markets either as you can see in the blue line; implied volatility in options with 30 days until expiration is trading above a one standard deviation move relative to the last year.
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