At-a-Glance

Key Takeaways with Craig

As CME’s Fed Funds futures were indicating this week, at least according to the FedWatch tool, the Fed held its target rate steady today but suggested it might not be done with rate hikes for the year.  US Equity prices initially sold off on the news, but near the cash equity market close, the Nasdaq was slightly higher, the S&P 500 was near steady and the Dow and Russell 2000 were lower.  Implied volatility in CME’s Equity Index options that have 30 days until they expire was little changed after the announcement and remains well below the 3-year average. 

Micro 10-Year Yields immediately rose a few basis points when the FOMC made its announcement but quickly fell back to pre-announcement levels and were trading just about 4 basis points lower than yesterday in late afternoon action.  The Micro 2-Year Yield is near the unchanged mark on the day.  CVOL continued to decline in both the 2 and 10 Year options.  In the 2-year options, CVOL is as low as it’s been since about March 8th and in the 10-Year options, one has to go back to mid-February to find a level this low.  This is illustrated in the top CVOL graph below with the 2-Year in orange and the 10-Year in blue.

CME’s FedWatch tool is not very different from yesterday, suggesting a 61.5% chance of a 25 basis point hike in July (versus 60% yesterday) and just a slightly higher probability than yesterday that the Fed Funds target is 50 basis points higher than its current level by December.   

In other CME Group markets, the price of WTI Crude Oil futures fell and the US Dollar was lower versus most major currencies.  The G5 aggregate CVOL level in CME’s FX options markets declined and is now trading at the lowest level since January 2022.  We’ve shown this is the lower CVOL graph below. 

So, even with all the seeming global uncertainty, both financial and geo-political, many of CME’s asset classes are characterized by low volatility and CVOL levels as we head into the second half of June.  We’ll be back tomorrow to report on CME market performance after the dust settles on today’s FOMC decision.  

Today's Future Price Action

Traders Resources

The information in the market commentaries have been obtained from sources believed to be reliable, but we do not guarantee its accuracy and expressly disclaim all liability. Neither the information nor any opinions expressed therein constitutes a solicitation of the purchase or sale of any futures or options contracts. The information on this site compiled by CME Group is for general purposes only. All information and data herein is provided as-is. Additionally, all examples on this site are hypothetical situations, used for explanation purposes only, and should not be considered investment advice or the results of actual market experience. CME Group assumes no responsibility for any errors or omissions. CME Group, its affiliates and any third party information and content providers expressly disclaim all liability with respect to the information and data contained herein including without limitation, any liability with respect to the accuracy or completeness of any data. You use the data herein solely at your own risk. All data and information provided herein is not intended for trading purposes or for trading advice. All matters pertaining to rules and specifications herein are made subject to and superseded by official CME, CBOT, NYMEX and COMEX rules. Current rules should be consulted in all cases concerning contract specifications.

Neither futures trading nor swaps trading are suitable for all investors, and each involves the risk of loss. Due to the leveraged nature of futures trading and swaps trading, it is possible to lose more than the amount deposited in a position. Therefore, traders should not deposit more funds than they can afford to lose without negatively affecting their lifestyles. A trader cannot expect to profit on each trade, and should only devote a small amount of their available funds to each trade. All references to options refer to options on futures.

Past performance is not necessarily indicative of future performance.

CME Group, the Globe Logo, Chicago Mercantile Exchange, Globex and CME are trademarks of Chicago Mercantile Exchange Inc. CBOT is the trademark of the Board of Trade of the City of Chicago, Inc. NYMEX is the trademark of the New York Mercantile Exchange, Inc. COMEX is a trademark of Commodity Exchange, Inc. All other marks are the property of their respective owners. Each of Chicago Mercantile Exchange Inc. (ARBN 103 432 391), The Board of Trade of the City of Chicago Inc (ARBN 110 594 459), the New York Mercantile Exchange Inc (ARBN 113 929 436) and Commodity Exchange, Inc. (ARBN 622 016 193) is a registered foreign company in Australia and holds an Australian market licence.

This site does not constitute a prospectus, product disclosure statement or legal advice, nor is it a recommendation to buy, sell or retain any specific investment or to utilise or refrain from utilising any particular service. Readers should consult their legal advisors for legal advice in connection with the matters covered on this site.

CME Group is the world’s leading derivatives marketplace. The company is comprised of four Designated Contract Markets (DCMs). 
Further information on each exchange's rules and product listings can be found by clicking on the links to CME, CBOT, NYMEX and COMEX.

© 2024 CME Group Inc. All rights reserved.