Russell 2000 E-minis, 10-Year T-Notes, Gold, Natural Gas and British Pound Futures
Russell 2000 E-minis, 10-Year T-Notes, Gold, Natural Gas and British Pound Futures
Five futures in focus. Right here, every weekday morning.
- Russell 2000 E-mini Futures (/RTY): +0.51%
- 10-Year T-Note Futures (/ZN): +0.01%
- Gold Futures (/GC): +0.20%
- Natural Gas Futures (/NG): -1.79%
- British Pound Futures (/6B): -0.17%
Tuesday may prove to be one of the quieter sessions of the week, lacking significant U.S. economic data releases or earnings reports. Traders may want to listen in to the three speeches from various Federal Reserve policymakers throughout the day, while the July U.S. existing home sales report could spark a move in homebuilders. Eyes remain on regional banks, which have been under increased pressure amid the latest jump in U.S. Treasury yields.
Symbol: Equities | Daily Change |
/ESU3 | +0.52% |
/NQU3 | +0.77% |
/RTYU3 | +0.51% |
/YMU3 | +0.23% |
Technical reversals higher across the major U.S. indexes on Monday have set up short-term bottoming efforts across the board. While /ESU3 and /NQU3 may have the more favorable setups, attention remains on /RTYU3, given its steep losses in August and connection to regional banks. The one-week and one-month correlation between /RTYU3 and /ZBU3 has reached +0.84, once again proving interest rates are the albatross around /RTYU3’s proverbial neck.
Strategy (4DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 1865 p Short 1870 p Short 1880 c Long 1885 c | 16% | +215 | -35 |
Long Strangle | Long 1870p Long 1880c | 47% | x | -1390 |
Short Put Vertical | Long 1865 p Short 1870 c | 55% | +105 | -145 |
Symbol: Bonds | Daily Change |
/ZTU3 | -0.03% |
/ZFU3 | -0.01% |
/ZNU3 | +0.01% |
/ZBU3 | +0.11% |
/UBU3 | +0.18% |
The U.S. Treasury 10-year yield enters Tuesday having just notched its highest close in 16 years. Rates are up across the board, led by the long-end. Overnight price action shaped up to offer a point of reprieve, however, as each of /ZNU3, /ZBU3, and /UBU3 are entering the U.S .trading session on slightly firmer ground.
Strategy (3DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 108.75 p Short 109 p Short 109.5 c Long 109.75 c | 33% | +171.88 | -78.13 |
Long Strangle | Long 109 p Long 109.5 c | 43% | x | -515.63 |
Short Put Vertical | Long 108.75 p Short 109 p | 65% | +93.75 | -171.88 |
Symbol: Metals | Daily Change |
/GCU3 | +0.20% |
/SIU3 | +0.26% |
/HGU3 | +0.71% |
Gold prices (/GCU3) are up nearly half a percent early Tuesday, extending yesterday’s price action when the metal hit its lowest level since early July before reversing higher. There is some appetite for Treasuries this morning, which is helping to push yields lower. /GCU3 is trading above the psychologically important 1,900 level and a daily close above the level may help to inspire additional confidence. That said, following a multi-month selloff, the current bounce may prove to be nothing more than a temporary profit-taking rally as shorts look to reposition for the next push lower.
Strategy (6DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 1890 p Short 1895 p Short 1905 c Long 1910 c | 33% | 370 | -130 |
Long Strangle | Long 1895 p Long 1905 c | 44% | x | -1,020 |
Short Put Vertical | Short 1895 p Long 1890 p | 88% | 40 | -460 |
Symbol: Energy | Daily Change |
/CLU3 | -0.49% |
/NGU3 | -1.79% |
U.S. natural gas prices (/NGU3) are down on Tuesday despite a rally in European prices. Dutch front-month futures (TTF) surged over 7% as labor leaders for workers at Australia’s North West Shelf liquified natural gas (LNG) export terminal attempt to strike a deal with Woodside Energy Group. If the two sides don’t reach an agreement by September 2, it could trigger a walk off, threatening up to 10% of global LNG supply. Today, energy traders have their eyes on U.S. stockpile figures from the American Petroleum Institute due at 16:30 EDT.
Strategy (6DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 2.55 p Short 2.57 p Long 2.61 c Short 2.60 c | 55% | 140 | -60 |
Long Strangle | Long 2.6 c Long 2.58 p | 47% | x | -1,590 |
Short Put Vertical | Short 2.58 p Long 2.57 p | 51% | 60 | -40 |
Symbol: FX | Daily Change |
/6AU3 | +0.20% |
/6BU3 | -0.17% |
/6CU3 | +0.12% |
/6EU3 | -0.31% |
/6JU3 | +0.07% |
While it’s been a mixed day for the U.S. dollar, two of the constituents of the DXY Index are facing a more difficult session than others: the European currencies. Both /6B and /6E are lagging the pack as economic data releases show the bite of higher interest rates is weighing down economic activity across the region. With the Federal Reserve Jackson Hole Economic Policy Symposium around the corner, the juxtaposition between the Fed on one side (higher for longer) and the Bank of England and European Central Bank on the other (facing down stagflation) will only become clearer.
Strategy (17DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 1.27 p Short 1.2725 p Short 1.2775 c Long 1.28 c | 18% | +137.50 | -18.75 |
Long Strangle | Long 1.2725 p Long 1.2775 c | 44% | x | -837.50 |
Short Put Vertical | Long 1.27 p Short 1.2725 p | 63% | +62.50 | -93.75 |
Christopher Vecchio, CFA, tastylive’s head of futures and forex, has been trading for nearly 20 years. He has consulted with multinational firms on FX hedging and lectured at Duke Law School on FX derivatives. Vecchio searches for high-convexity opportunities at the crossroads of macroeconomics and global politics. He hosts Futures Power Hour Monday-Friday and Let Me Explain on Tuesdays, and co-hosts Overtime, Monday-Thursday. @cvecchiofx
Thomas Westwater, a tastylive financial writer and analyst, has eight years of markets and trading experience. @fxwestwater
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