Hormuz blocked
March 3, 2026
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–Sunday night all interest rate futures posted new highs, but faded from there, with huge outside day ranges and settles near the lows. Typically this type of formation signals a reversal as buying pressure has been shut down. Late yesterday Iran said it was shutting down the Straits of Hormuz; oil is now at new highs (CLK6 76.12) and yields have continued to press higher as well. Whether it’s because of the inflationary aspect of higher energy prices, or the prospect that armament manufacturing is going into overdrive isn’t particularly clear, but Sunday night low yield in 10y was 3.92 and it’s now 4.10!
–ESH tested the year’s low overnight. On Feb 6, the low was 6751.50 and early this morning 6751.0 (though just now it’s printing lower). Breakout to downside of big sideways formation probably signals a test of the 200 DMA at 6668. Aside from the mideast war, several press articles highlight large redemptions from Blackstone’s flagship private credit fund. They all boast about daily liquidity…until they’re gated.
–TUM6 settled yesterday at 104-131 with cash yield 3.483% (up 10.8 bps on the day). Still there were some late protection upside buys: +30k TUJ6 106.625c for 0.5, then +50k TUK6 106.5c for 0.5. Range of market scenarios seems to be rapidly widening out. March VIX yesterday settled 20.93, and is 23.35 as of this morning note.
