JimHuangChicago

JimHuangChicago Wizard

CME: Chinese Yuan (CNH) Euro FX (6E), Micro S&P (MES), Micro Nasdaq (MNQ) The US government is within ten days of defaulting on its debts. If this unprecedented catastrophe were to happen, what could it trigger? Risky assets, from stock, bonds, FX, to commodities, will go through a violent period of reset and repricing. Weaker economies could be hit hard if the...

JimHuangChicago Wizard

CME: Live Cattle ( CME:LE1! ), Lean Hog ( CME:HE1! ) When I started my career in commodity futures two decades ago, I took lectures from a former trader at the CME livestock pit. Mike used his favorite trade to explain the complex concept of inter-commodity spread. Here it is: Beef and pork typically had a retail price difference of $1 per pound. For example, a...

JimHuangChicago Wizard

CBOT: Soybean ( CBOT:ZS1! ), Soybean Meal ( CBOT:ZM1! ), Soybean Oil ( CBOT:ZL1! ) This is the second installment on CBOT Soybean Complex. If you have not read the first piece, please click the link at the end of this idea. Let’s start with a discussion of two reports followed by soybean market participants. The Crop Report U.S. Department of Agriculture...

JimHuangChicago Wizard

CBOT: Soybean ( CBOT:ZS1! ), Soybean Meal ( CBOT:ZM1! ), Soybean Oil ( CBOT:ZL1! ) Today, I am starting a new series on CBOT soybeans, one of the most liquid commodities contracts in the world. In March 2023, Soybean, Soybean Meal, and Soybean Oil together traded 14.0 million lots, contributing to 42.6% of CME Group agricultural futures and options volume,...

JimHuangChicago Wizard

CME: E-Mini S&P 500 Put Options ( CME_MINI:ES1! ) Important data releases in the coming weeks would shed light on the health of the US economy and could have significant impacts on global financial markets. We will focus on a number of critical datasets, mainly the following, in the upcoming weeks: • Federal tax revenue (Tax filing deadline: April 18) • Existing...

JimHuangChicago Wizard

CME: Offshore RMB ( CME:CNH1! ), Micro RMB ( CME_MINI:MNH1! ) On April 5th, the Bureau of Economic Analysis reported the latest U.S. global trade data. For the first two months of 2023, total export and import were $328.9 and $489.7 billion, respectively. U.S. international trade balance was $160.9 billion in deficit. Export growth was very strong, at 9.5%...

JimHuangChicago Wizard

NYMEX: WTI ( NYMEX:CL1! ), RBOB Gasoline ( NYMEX:RB1! ) Over the weekend, eight OPEC producers, led by Saudi Arabia, announced intentions to cut oil production by 1.16 million barrels per day through the end of the year. This adds to Russia’s existing plan to trim 500,000 barrels from February level, bringing the combined voluntary cuts of OPEC+ members in excess...

JimHuangChicago Wizard

CME: Micro Bitcoin ( CME:MBT1! ) and Micro ETH ( CME:MET1! ) In First Quarter 2023, Cryptocurrencies rebounded strongly amid turmoil in the financial markets. CME Micro Bitcoin Futures (MBT) gained $11,825 or +71% year-to-date. Micro ETH Futures (MET) gained $510 or +39% YTD. Bitcoin rallied amid the collapses of Silicon Valley Bank and Credit Suisse. While US...

JimHuangChicago Wizard

NYMEX: WTI Crude Oil ( NYMEX:CL1! ) On March 30, 1983, New York Mercantile Exchange (NYMEX) launched futures contract on WTI crude oil. This marked the beginning of an era of energy futures. WTI is now the most liquid commodity futures contract in the world. It’s 1.7 million daily volume is equivalent to 1.7 billion barrels of crude oil and $125 billion in...

JimHuangChicago Wizard

COMEX: Micro Gold Futures ( COMEX_MINI:MGC1! ) Gold prices surged Friday as a wave of banking crises shook global financial markets. Spot gold climbed 3.1% to $1,977.89 per ounce, its highest level since April 2022. Gold price is now within $100 of its all-time high of $2,074.88. In the futures market, the nearby April contract of COMEX gold futures settled at...

JimHuangChicago Wizard

CBOT: 10-Year Treasury Futures ( CBOT:ZN1! ) Last Wednesday, Silicon Valley Bank (SVB) NASDAQ:SIVB announced that it incurred $1.8 billion loss in the sales of its bond portfolio and sought to issue new shares. Within 48 hours, a bank-run induced by panic customers brought down the legendary bank. On Friday, US banking regulators seized control of SVB. By...

JimHuangChicago Wizard

COMEX: Micro Gold Futures ( COMEX_MINI:MGC1! ) and Gold Options ( COMEX:GC1! ) Gold is often hailed as an effective hedge against inflation. It generally increases in value as the purchasing power of the US dollar declines over time. Does this still remain true? Since January 2013, the US Consumer Price Index increased 29.4% cumulatively, while the 10-year total...

JimHuangChicago Wizard

CME: E-Mini S&P Retail Select Industry Futures ( CME:SXR1! ) Last Friday, the U.S. Bureau of Economic Analysis (BEA) released the latest Personal Income and Outlays Report. Personal income gained $131.1 billion (0.6%). Disposable personal income (DPI) added $387.4 billion (2.0%) and personal consumption expenditures (PCE) grew $312.5 billion (1.8%) for the month...

JimHuangChicago Wizard

CBOT: Micro Treasury Yields ( CBOT_MINI:2YY1! , CBOT_MINI:5YY1! , CBOT_MINI:10Y1! , CBOT_MINI:30Y1! ) Is the US economy heading towards a “no landing”, as opposed to a “hard landing” or a “soft landing"? There is a heated debate among economists and market strategists. What is a "no landing"? It is a new term drawn up by Wall Street, which describes the...

JimHuangChicago Wizard

CME: S&P Technology Select Sector ( CME_MINI:XAK1! ) The U.S. consumer price index (CPI) rose 0.5% in January and +6.4% year over year, reported the Bureau of Labor Statistics (BLS) on Tuesday. Excluding food and energy, Core CPI increased 0.4% monthly and 5.6% yearly. Economists surveyed by Dow Jones expected the headline CPI to grow 0.4% monthly and 6.2%...

JimHuangChicago Wizard

CME: USD/RMB Futures ( CME:CNH1! ) US-China relations are arguably the most challenging bilateral relations in the 21st century. It has been in a free fall since the 2018 trade conflict. The competition has intensified and spread to investment, technology, among other arenas since then. On November 14th, 2022, President Biden met with President Xi during the...

JimHuangChicago Wizard

CBOT: Treasury Yield Spread 10Y-2YY ( CBOT_MINI:10Y1! CBOT_MINI:2YY1! ), Micro Dow ( CBOT_MINI:MYM1! ), Micro S&P ( CME_MINI:MES1! ) On Wednesday, the Federal Reserve raises its benchmark Fed Funds rate by 25 basis points to a target range of 4.5%-4.75%. The move marked the eighth consecutive hikes that have began in March 2022. The overnight risk-free rate is...

JimHuangChicago Wizard

E-Mini S&P ( CME_MINI:ES1! ), Euro FX ( CME:6E1! ), 10-Year Note ( CBOT:ZN1! ) True or False? • US Government has never defaulted on its debt obligations. • US Treasury bonds have always maintained AAA credit ratings. A history lesson: In June 1812, 30 years after the Revolutionary War, the U.S. declared war against Britain and Spain. In August 1814, British...