What now?
June 13, 2025
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–Israel attack on Iran’s nuclear facilities last night is the dominant factor. In my opinion, secondary effects and responses are likely to drain confidence from consumers. U of Michigan Sentiment comes out today (already old data at this point) and is expected 53.6 from last at 52.2, which was already near historic lows. When does it transfer over to ‘hard’ data? Now.
–I suspect that the US’ former open border policy allowed terrorist cells to infiltrate. The near-term risk of attacks on US soil have increased substantially.
–June options settle today in SOFR. SFRM5 only traded up to 9570, but in my opinion, given the increase in geopolitical uncertainty, there would still have been a chance for a Fed ‘insurance’ ease next week if Trump hadn’t called Powell a numbskull. Right back at ya, Don. No ease for you. ESM5 range 117.5 so far today. At the low of 5927.50 the contract was down 122 from Thursday’s settle.
–Exit seller yesterday of 50k SFRH6 9550/9500ps at 1.25. Last week there was a buyer of 12.5k SFRN5/Q5/U5 condor strip: 9575/9593.75/9600/9618.75 for 13.0 ref 9585. Yesterday he added 6k paying 19.0 for 6k ref 9591.0. Increase in value a function of both the rally and fall in vol.
–August Gold now 3444, up 42. High settles in this contract: 3454.60 on April 21 and 3452.1 on May 6.
–Jobless Claims yesterday 248k, high of this calendar year. Household Net Worth down to 169T from 171T in Q1 (function of equities).
