At-a-Glance
Key Takeaways with Craig
US Equity Indexes sold off sharply to end an extraordinarily volatile week after this morning’s July Employment report reflected a slowing labor market and unemployment ticking up to 4.3%. The increase in CVOL and implied volatility in our chart below that we compiled using CVOL and QuikStrike data, somewhat speak for themselves, but here are some takeaways.
- All major US Equity Indexes traded lower this week, particularly the E-mini Russell 2000, which had outperformed for most of July. In relative terms, the implied volatility in E-mini S&P 500 options rose by nearly 40% this week.
- US Treasury yields fell sharply as CME’s 10-Year Treasury Yield future was down by over 40 basis points to under 3.8%. For the first time since July, 2022, the 10-Year Treasury is yielding about the same as the 2-Year, as the 2-Year yield fell even further this week. CVOL throughout the entire yield curve spiked.
- CME’s FedWatch tool is now pricing in a 70% chance of a 50-basis point cut to the Fed Funds target range at the September meeting.
- Gold is trading near all-time highs and CVOL rose by a relative 31% this week.
- Cryptocurrency prices remain volatile, though implied volatility in the Bitcoin options fell this week.
As we said yesterday, these are shaping up to be anything but the “dog days of summer” in the financial and commodity markets. We wish all our readers a happy and safe weekend and we’ll see you on Monday.
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