Late stock profit-taking; oil down
August 17, 2022
–Curve flattened a bit as an early sell-off in the long end reversed. Twos ended +4.6 bps at 3.247 while thirties rose only 1.6 to 3.112. Near ED calendars closed at the top end of ranges as a Fed pushback against the idea of eases next year filtered in. SFRZ2/SFRZ3 settled -39.5 (9648/9685.5) while FFF3/FFF4 settled -32.5 (9648.5/9681). Still inverted, but much more circumspect about pricing eases over 2023. Recall a couple of weeks ago there was a large block buy of SFRZ2/Z3 at -63; since exited. FOMC minutes this afternoon.
–Late in the day CLU2 was 86.95, down 2.46. Retail Sales today expected 0.1 month/month. The price of energy has a large impact on consumer behavior. And, it seems as though stocks reacted positively to lower oil as well, making a new high for the move, though there was a late sell-off which saw SPX close only modestly higher.
