3 yrs ago, WTI went negative. Now near 80 bbl on OPEC+ production cuts
April 3, 2023
–CLK3 up 5.2% at 79.62 as of this writing as MBS was apparently displeased that the Biden admin refused to support oil by buying for the SPR with prices in the low 70s. OPEC+ cutting production by 1mbd. It was three years ago in April that front WTI crude went negative during Covid, causing Core PCE to fall below 1%. On Friday, PCE prices were lower than expected at 5.0 with Core 4.6%. Also on Friday Waller cited anchored inflation expectations as an important factor which could support the idea of lower inflation without much in the way of job losses.
–ISM Mfg today expected 47.5.
–Friday featured higher fixed income prices. Ten year yield fell 5 bps to 3.494%.
–Large TY call spread exits Friday. Sale of 40k TYM3 111.5/113.5cs ~1’27, settled 1’40 ref 114-295, and sale of 15k TYM3 113/114cs 1’19 to 1’20. settled 1’24. These were bought right around SVB news, near the lows in TY.
–April FF, which expire at the end of the month, settled 9518.5. One year forward FFJ4 settled 9600.5, or 3.995%. On the treasury curve, only the two year sports a 4% handle (4.06%).
