Key Takeaways with Craig

US Equity prices came roaring out of the gate to begin October trading as all four major indexes traded sharply higher.  With the price rally, implied volatility in CME’s Equity Index options markets came off, but remains elevated relative to the last few months.  US Treasury yields traded lower, especially the 10-Year where the Micro 10-Year Yield futures price was down by about 15.5 basis points.  The Micro 2-Year Yield was only down by about 8 basis points so the inversion of the 2s versus 10s is back up to over 50 basis points. 

CME Group FX futures markets showed the US Dollar mostly weaker against major currencies as follows:

  • British Pound was up 1.3% versus the Dollar
  • Aussie Dollar was up 1.6%
  • Canadian Dollar was up 1.3%

Finally, WTI Crude Oil futures prices were up by nearly 5% after it was reported that the group known as OPEC+ was considering an output cut of more than 1 million barrels per day.  Interestingly, according to CME’s OPEC Watch Tool, which uses NYMEX WTI crude oil option prices to calculate the probabilities of certain outcomes from the nearest weekly and monthly options that expire around the OPEC meeting, the options market is pricing in a nearly 60% chance of no change or small output increase at this week’s OPEC meeting and a 40% chance of an output decrease.  We’ve included an excerpt from the tool below.  If you would like to learn more about this tool which is available on CME’s website, please click here

Today's Future Price Action

Traders Resources

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