At-a-Glance
Key Takeaways with Craig
As we move into the last two weeks of the year, US Equity Indexes traded higher, while Treasury yields were little changed. Of course, the year’s not quite over yet and the FOMC will make one final decision on interest rate policy in 2024 on Wednesday. CME’s FedWatch tool is currently reflecting a 95% probability that the Fed will cut its Fed Funds target rate by 25 basis points at that meeting. The market will likely be looking for clues as to what the Fed might do in 2025 in the statement that accompanies the announcement. As we frequently point out here in the Key Takeaways section, oftentimes, the options market prices in the potential for outsized price moves associated with things like an FOMC announcement that manifests itself with elevated implied volatility. As you can see from the implied volatility curve in CME’s E-mini Nasdaq-100 options, while the options that expire on Wednesday (Q3CZ4) are trading slightly higher, it is not as exaggerated as we sometimes see. The options that expire on New Years Eve, however (NEZ4) are trading with much higher vol levels.
In other CME Group markets, Bitcoin futures were active again today, up by about 4.25% from Friday’s close and with a daily range of about 4,805. The “spot” or “cash” price of Bitcoin hit a new all-time high today of over $107k per Bitcoin.
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