Key Takeaways with Craig

US Equity prices struggled to find a clear direction for most of the day, then fluctuated after the FOMC meeting minutes were released, before finishing mostly lower (though the Nasdaq index did manage a fractional gain).  US Treasury yields spent most of the day, and finished, around the unchanged mark, though the Micro 10-Year did fall by 3 basis points while the 2-Year was steady, leading to a widening of that inversion to close to 80 basis points.  CME’s FedWatch tool indicated just a fractionally higher percent probability for higher Fed Funds target rates at the end of the day.

Once again, CME’s Energy markets were relatively active as WTI Crude Oil futures prices were down by over 3% and Nat Gas prices were up by almost 5%.  The two graphs below provide a historical perspective on where Nat Gas price and volatility levels are current trading. The top graph is the CVOL (implied volatility) level of Nat Gas options since October, 2013.  As you can see, even though its come down from its highest levels, volatility remains historically well above average (the orange line represents the average closing level).  The bottom graph represents the price of the April expiration, now, and at this time of year since 2015.  As you can see, with the price break we’ve seen in Nat Gas, it is now trading below the level it’s been at this time of year in most years since 2015. 

Today's Future Price Action

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