Key Takeaways with Craig
US Equities fell after the Fed released the minutes from its last meeting and ended the day with modest gains. CME’s FedWatch tool, which uses Fed Funds futures prices to assign a probability to FOMC target rate actions, was little changed from yesterday after the minutes were released. US Treasury Yields fell at the longer end of the curve but were little changed in the 2-Year. According to CME’s Micro Treasury Yield contracts, the 2-Year yield was down by about 1 basis point while the 10-Year fell by about 10 basis, bringing the 2s versus 10s inversion to about 66 basis points.
CME WTI Crude Oil futures prices were down by about 5% in late afternoon trading and were again trading below $75 per barrel. The CVOL level in WTI Crude Oil jumped by nearly 10% with the decline in prices.
Looking ahead, Friday brings us the December Employment report which will provide the latest read on the health of the US economy and labor market. As has been the case recently, the options market is pricing in the potential for the number release to move futures prices in several different products. The QuikStrike graph below of the volatility curve in E-mini S&P 500 options underscores this idea.
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