Key Takeaways with Craig

As we talked about yesterday, the July Employment report was released this morning and indicated a stronger than expected labor market.  The initial reaction in the Equity market was one of “good news is bad news” as prices broke on the news.  However, equity prices recovered to close mixed with the Nasdaq down by about 1% and the Dow and S&P 500 near steady on the day.  US Treasury yields jumped with the Micro 2-Year Treasury up about 20 basis points and the 10-Year up about 15.  This makes the 2s and 10s inverted by about 42 basis points.  Also, CME’s FedWatch tool now reflects a 68.5% chance of a 75 basis point rate hike at the September FOMC meeting; up from about 34% yesterday. 

As we often do on Fridays, here is a recap of the net price and volatility changes during the first week of August in some of CME’s major products using QuikStrike data:

  • E-mini S&P 500 futures prices were near steady while the Nasdaq-100 rose slightly.  Implied volatility was nearly unchanged in both options markets.
  • WTI Crude Oil futures prices were down by 10% while implied volatility in the options rose slightly.
  • US Treasury yields jumped with most of the increase coming today, as we mentioned above. 
  • Soybean and Corn prices fell just slightly though volatility in the options declined substantially. 

So, even as we enter the dog days of August, to say CME financial and commodity markets remain active is an understatement.  Have a wonderful weekend and we’ll see you all on Monday.  

Today's Future Price Action

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