Oil Surge Weighs on FI
March 9, 2026
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–The WSJ site features this chart of inflation adjusted oil prices:
–WTI spiked close to 120/bbl early this morning but is now back around $100. It’s worth noting that the front WTI contract was also above 120 at the start of the Russia/Ukraine invasion. As is typically the case, gov’t actors step in to help (as is being considered now) by releasing reserves etc. I’m sure China will be a willing buyer if Western Gov’ts are able to force prices down.
–Friday’s lower than expected payroll release of -92k sparked a brief rally in bonds which was quickly extinguished. Ten-yr cash yield tested 4.10 but ended at 4.127%. High in TYM6 was 112-21, settled 112-14, now 112-04 (early Mon morning). High in the peak SOFR contract, SFRU7, was 9685, though later in the day the high tick was 9686.5, Settle was 9682, currently 9677.5.
–Nikkei down 5.2% today, though the index had nearly doubled from just over 30k to just under 60k from last year’s Liberation Day to the end of February. From end of Feb high print to now Nikkei fell around 13%. By contrast SPX from this year’s high to low is a pullback of just over 4%.
–FOMC is next week, Current EFFR is 3.64 or 9636. April Fed Funds are 9637, so these is essentially no expectation of ease. The May FF contract captures the April 29 FOMC and that settled 9640, so there’s currently less than 20% odds of an ease at that meeting. Perhaps another bad payroll report next month will increase odds of an ease, or maybe it won’t happen until Warsh is installed. In any case, weight on the short end has been unrelenting over the past week.
