SOFR Option Weekly Commentary 8/7/26
Today's Payroll numbers came in lower than expected & Two-Month Payroll net revisions were down 103K - causing fixed income futures to rally as odds of a cursory Fed hike lessened. The current odds of the Fed on Hold thru the FOMC's Dec 9th meeting are 23% (up from 12.8% last week), while the odds of at least one 25 bp hike are now 77% (down from 87.2% last week). The 10Yr is currently trading @ 4.65%
Sofr Option Vols were lower this week (see attached spread sheet).