I’m going off the rails…
February 14, 2023
–Big data today is CPI, expected 0.5 mom and 6.2 yoy vs 6.5 last. Core expected 0.4 mom and 5.5 yoy vs 5.7 last. Also worth noting that NFIB small business optimism is released and last was 89.8. That value approaches the low since 2013 which was in June 2022 at 89.5 (covid low was 90.9 and GFC low 81.6). Retail Sales tomorrow expected +1.8 mom; a ZH article citing BofA suggests that credit card usage could translate into a blowout number. The Social Sec COLA increase was 8.7%, which kicked in with the turn of the calendar, which may also have helped boost spending. It’s not MY credit card, it’s the GOVERNMENT’S credit card.
–Selling pressure continues in the front end with SFRM3 -2.5 at 9479.5, a new low (lowest contract on the strip). Buyer of 50k SFRZ3 9450/9400ps for 9 to 9.25 (Z3 settled 9512.5). Vol firmed in front of CPI, esp for nearer maturity high gamma. For example, FVH3 107.75 straddle was 59/60 at the open, but a buyer of 20k FVH 107p for 11 covered 107-27 to 27+ helped juice the straddle to 62/63 by the close at essentitally the same futures price.
–US inexplicably announced further sales from the SPR while simultaneously naming Lael Brainard as Biden’s top econ advisor (Director of the NEC). Don’t do it Lael! You will be the scapegoat for soaring oil prices as Chinese demand accelerates.
–Train derailment in Ohio from Feb 3 is increasingly being referred to as an environmental disaster. As poet-philosopher Ozzy says, “The media sells it and you live the role.”
https://www.npr.org/2023/02/14/1156567743/health-east-palestine-ohio-train-derailment-chemicals
