Oil pullback helping stabilize markets
March 10, 2026
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–Through last week and into yesterday selling pressure was evident in rate futures, particularly in shorter maturities, as Iran hostilities boosted oil prices and gave rise to increased inflation concerns. On Friday 2/27 red sofr pack settled 9704.625, popped higher Sunday night and has declined ever since. Yesterday’s settle was 9676.25 (-3.875) so closer to 3.25%. However, Trump’s hints of de-escalation late yesterday and this morning have sent oil lower and fixed income prices higher. After reaching 113.41 on Sunday night, CLK6 is currently 84.00 (-7.48 on the day). This morning Netanyahu warns that the war on Iran ‘has not ended yet’.
–Some curve measures closed at new lows yesterday, with 5/30 100.6, down 3.6 bps (recent high 112.3). 2/10 is stuck near the low at 54.4 and red/gold pack spread is just 38.375. If oil continues to retrace lower these spreads will likely rebound somewhat. The market is NOT pricing near-term easing, however fears of accelerating labor market weakness due to AI and general uncertainty are still lurking. Private credit/equity issues remain as well.
–Today’s news includes Existing Home Sales and 3yr auction ($58b, followed by 10, 30 on Wed/Th). Small pullback in NFIB Small Business Optimism to 98.8 from 99.3. CPI tomorrow.
–March midcurve options expire Friday. As of yesterday settled 0QH 9675^ 13.0 ref 9671.5, 2QH 9675^ 12.5 ref 9677.5 and 3QH 9662.5^ 11.5 ref 9662.0. Probably priced appropriately, though if I had to be involved I would favor long calls into the end of the week.
