Quiet start to Fed week

April 27, 2021

–Quiet Monday with the ten year yield unchanged at 1.567%.  Implied vol continues to ease with TYM 4.5%.  Corn, beans and copper all at new highs this morning with July Corn over 670 and beans over 1550, as the Fed prepares to fine-tune its message that inflation pressures are transitory.  FOMC announcement and press conference are tomorrow.  The BOJ in its meeting today cited mobile phone rates as a pressure on prices.  From the statement: “With regard to the risk balance, risks to economic activity are skewed to the downside for the time being, mainly due to the impact of COVID-19, but are generally balanced for the middle of the projection period onward. Risks to prices are skewed to the downside.”

–Stocks remain well bid with SPX pinning all-time-highs.  Earnings this week include MSFT and Alphabet today, Apple tomorrow and Amazon on Thursday.  The CBOE equity put-call ratio remains at the lower end of the range at 0.43.  I have included a chart of SPX as a percentage above or below the 200 day moving average.  Currently its over 15% higher than the 200 day.  The only time in recent history that it was more elevated was in 2009 rallying after the deep plunge related to the GFC.  

Posted on April 27, 2021 at 5:17 am by alexmanzara · Permalink
In: Eurodollar Options

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