A modest risk-on tone emerged overnight after Australia’s central bank decided to pause its rate hike cycle to assess the impact of policy tightening to this point. S&P 500 futures are up 0.3% ahead of the open (8:06am ET), and Treasury yields are 4-6 basis points higher. St. Louis Fed President Bullard said yesterday that OPEC’s surprise decision to cut oil production could make the Fed’s job “a little bit more difficult” in bringing down inflation. Implied rate volatility has come down from the recent highs as turmoil in the banking market has calmed somewhat. The MOVE Index, which tracks 1-month options on Treasuries across the curve has fallen from 199 basis points on March 15, a post-GFC high, to 138 basis points yesterday, just above the 12-month average (128 bps). Later this morning, the JOLTS report for February will be released, which will provide a fresh look at the number of job openings.
Jason Haley
Chief Investment Officer
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