Looking to the Futures
Treasury Futures Rise Following Fed Rate Hike.
Treasury futures are trading up Thursday afternoon following the Federal Reserve’s decision to raise the target interest rate to the 375-400 range. The Ultra 10-year U.S. Treasury Note Futures are trading up .41% at 107’260. The Federal Open Market Committee voted 12-0 for the 25-basis point increase, the first major policy move under the new Fed Chair Kevin Warsh.
Inflation concerns remain the major topic driving the rate hike. The Federal Reserve issued a brief FOMC statement saying “Economic activity is expanding at a solid pace. Productivity growth is strong, and capital investment is robust. Job gains have kept pace with the workforce, and the unemployment rate has changed little.” While continuing to add, “Inflation remains elevated. Today's policy action will support a timelier return to the Committee's 2 percent goal. The Committee will deliver price stability”
The next Federal Reserve meeting is scheduled for October 28th and currently shows a 50.9% chance to rise into the 400-425 range, confirming the markets signal to raise rates once more this year.
U.S. initial jobless claims unexpectedly dropped to 196,000 for the week ending September 12th, decreasing by 10,000. Analysts’ expectation we’re in the 207,000 – 208,000 range. The four-week moving average slipped by 2,750 to 203,250.
Crude oil futures remain relatively flat this afternoon, with October crude oil futures trading at 101.90, down just .53 on the day. This comes after the Trump administration released a statement saying the damaged Saudi pipeline will restart operations in just days. However independent analysists say the pipeline could remain down for weeks based on satellite images showing significant damage to a pumping station per CNBC.
Technicals
Today we have a 1-year, 1-day chart of the December Ultra 10-Year U.S. Treasury Futures (/TNZ26). The last high came back on March 2nd as the conflict in Iran began to break out, rising inflation concerns and high energy costs. Since then, the 10-year Ultra has trailed off to a low of 107'020 before the Fed announcement on Wednesday. Implied volatility on the 10-year comes in at just .0685.
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What else to watch today
Major economic reports, trading events, and news items that could potentially impact specific futures markets:
- Quadruple Witching
- Industrial Production 9:15 AM ET
- Fed’s Bowman Speaks 9:30 AM ET
- Leading Economic Indicators 10:00 AM ET
- Fed’s Schmid Speaks 10:30 AM ET
New Products
New futures products are available to trade with a futures-approved account on all thinkorswim platforms:
- Ripple (/XRP)
- Micro Ripple (/MXP)
- 100 OZ Silver (/SIC)
- 1 OZ Gold (/1OZ)
- Solana (/SOL)
- Micro Solana (/MSL)
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