Derivatives Market Color You Can Count On

You can receive our Daily Market Color straight in your in-box every morning. Click here to be added to our email list.

August 26, 2020

Rates Continue to Ride on Vaccine Highs

Risk assets hit new record highs once morhit new record highs once more, extend record rally. Once again, equities are on pace for a record close after hitting all-time highs again yesterday. The rally comes as investors await Jerome Powell’s speech tomorrow where he’s expect to reaffirm the Fed’s highly accommodative monetary policy and confirm that the Fed will keep rates at 0% until they see inflation persistently above 2%. Swap rates and Treasury yields have also pushed higher- the 10-year Treasury yield sitting at 0.71% on the day (up 10 bps over the past three days)...

August 25, 2020

Potential COVID-19 Treatment Pushes Rates Higher Across the Curve

Stocks hit new records, rates climb as Trump administration hints at new vaccine. The S&P 500 rose 1% to close at another record high on the news that the Trump administration is considering expediting the use of an experimental COVID-19 vaccine from the UK. The Nasdaq Composite would also hit a record high- climbing 0.6% to end at its 37th record close of 2020 while the DJIA rose 1.4%, roughly 4% below its all-time high hit in February. Treasury yields and swap rates rose on the day and are sharply higher this morning on the news that US and China are making progress...

August 24, 2020

S&P 500 Rises for Fourth Consecutive Week

Equity futures climb higher as Trump administration considers fast-tracking additional COVID-19 vaccine. The S&P 500 ended last week at a new record high to mark its fourth straight week of gains -- the longest winning streak this year. The Nasdaq also hit another record- rising 0.4% while the DJIA closed 0.7% higher. Futures are pointing to another record breaking session, this time on news that the Trump administration will potentially aware “emergency use authorization” to a UK vaccine developed jointly by AstraZeneca and Oxford. Swap rates and Treasury yields are...

August 21, 2020

Tech Rally Pushes Nasdaq 100 to Another All-Time High

Tech rally pushes risk assets to record highs. Once again, equities shrugged off disappointing economic data (this time initial jobless claims) to climb higher once again. The Nasdaq gained 1.1% to mark its 35th record close of 2020, while the S&P 500 and DJIA rose 0.3% and 0.2% respectively. Treasury yields and swap rates turned lower across the curve -- the 10-year closing 3 bps lower on the day. Yields are trading 1-3 bps lower this morning.

August 20, 2020

Rates Rise Moderately After FOMC Minutes

FOMC minutes reveal lower growth expectations, no imminent yield curve control. In the FOMC minutes released Wednesday afternoon, officials commented they expect a deceleration in GDP growth and job growth. Fed officials agreed that monetary policy should remain “highly accommodative” and that additional fiscal stimulus is also necessary to support the U.S. economy. Fed officials also stated that policy caps on Treasury yields (known commonly as “yield curve control”) were "not warranted in the current environment." Lastly, the Fed indicated that it will be more precise on...

August 19, 2020

S&P 500 Hits a New All-Time High

Swap rates, Treasury yields continue to retreat ahead of FOMC minutes. Rates have continued to fall from their recent highs, swap rates and Treasury yields falling 1-2 basis points across the curve yesterday and an additional 1-2 basis points today. The curve has continued to flatten, but remains relatively steep with the 2s10s spread sitting at 52 basis points. With the market in search of fresh catalysts, much of the attention today will be on stimulus talks and the release of the latest FOMC minutes at 2:00 ET. The minutes will will help shed some light on potential...

August 18, 2020

Tech Rally Drives Equities to Near Record Highs

Tech rally drives risk assets higher. While the timeline for the stimulus bill and vaccine still unclear, equity markets have been slowly advancing throughout August. Major indices rose yesterday with the S&P 500 on the cusp of another record, closing up 0.3%. The DJIA fell 0.3% while the Nasdaq rose 1% to hit another all-time record. Treasury yields and swap rates reversed direction from last week's dramatic rise to close moderately lower across the curve. Yields are trading 1-2 bps lower this morning.

August 17, 2020

Treasury Yields Rise Despite US-China Postponing Trade Talks

Equities set to open higher despite rising US-China tensions. On Friday, the US and China decided to postpone Phase One trade talks originally scheduled for this past weekend. Combined with rising virus cases, equities ended Friday almost flat after fluctuating near record highs throughout the week. Last week, after the increase in debt supply, longer-term bond yields increased dramatically across a steepening curve -- the 30-year yield rising 21 basis points overall. This morning, yields are trading 1-3 bps lower.

August 14, 2020

Rates Continue to Rise Across a Steepening Curve

Rates continue to march higher across a steepening curve. Yesterday Treasurys sold off as initial jobless claims were reported to dip below 1 million last week, the first time since March. Yields/swap rates rose to their highest levels since mid-June -- the 10-year UST yield closing at 0.72%. And while improving economic data and hopes for a new stimulus bill have driven long term rates higher since the beginning of the month, the short end has remained stubbornly low -- the 2y10y spread widening to 56 basis points. In equity markets, yesterday’s positive economic data...

August 13, 2020

Treasury Yields Rise After Better-Than-Expected Inflation Data

Strong CPI print pushes rates and risk assets higher. Rates and risk assets rose sharply yesterday after Core CPI figures showed a month over month increase in prices of 0.6%. The S&P ended 1.4% higher, within reach of its record high while the DJIA and Nasdaq rose 1% and 2.1% respectively. Treasury yields and swap rates climbed as well- the 10-year Treasury yield rising 3 basis points to 0.67%- nearly 20 basis points off its early August lows.


Ready to see how DerivativeEDGETM can work for you?

schedule a demo