Bonds and oil bid this morning
November 4, 2024
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(As of 5:45am EST)
–Rate futures closed out the week on the lows, though Friday’s rate moves have been completely erased this morning. Tens closed Friday +7.7 bps at 4.355%; now 4.29%. Red sofr contracts were -4 with SFRZ5 9630. At the end of September this contract settled 9700. SFRZ4/Z5 one-yr calendar settled at a new high -67. On Sept 11, just prior to last FOMC, it was -132. Auctions of 3s, 10s and 30s start today, $58b 3yr today.
–Election and FOMC this week. WTI CLZ4 is up around $2/bbl as of this note at 71.48. CLZ4/Z5 calendar has moved from a premium of around $2 for the Z4 contract to around $3 this morning. Strong demand for near otm calls; skew bid (chart). Just a reminder that geopolitical concerns also loom large.
