Key Takeaways with Craig

US Equity prices continue to rally, especially the Dow, which was up by nearly 500 points and the small-cap Russell 2000, which was up by about 2.25%.  Not surprising, given the stock market rallies, implied volatility in CME’s Equity Index options continues to trade near multi-year lows. 

US Treasury Yields continue to trade in a relatively tight range, with the 2-Year Treasury Yield future down by about 2 basis points and the 10-Year lower by about 4 basis points.  Fed Funds futures were also little changed, as reflected in CME’s FedWatch tool, which continues to suggest an approximately 64% chance of the first cut to target rate at the June meeting.

Given what seemed to be relatively muted changes in US Treasury yields lately, we took a look at the last month of price changes in CME’s 2 and 10-Year Treasury Yield futures in the graph below.  As you can see in the graph below, in the last month, the 2-Year has traded in approximately a 30 basis point range and the 10-Year in approximately a 25 basis point range.  However, if we go back to the last couple of weeks, to around mid-March, this range narrows to about 11 basis points in the 2-Year and approximately 14 basis points in the 10-Year. 

So, for another day, lower volatility and higher equity prices continue to be the story.  We’ll be back tomorrow to wrap up the holiday-shortened week and the last day of trading for the Month and the Quarter!

Today's Future Price Action

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