SOFR Option Weekly Commentary 5/8/26
Today's Payroll numbers (Nonfarm & Private) came in stronger than expected. The US economy continues to be resilient, even with the Iran War unresolved & Oil prices elevated. Stocks resumed their rally based on strong earnings with the S&P 500 at New All-time highs again this week.
The current odds of a 25 bp cut by the FOMC's Dec 9th meeting are 10.7% (down from 14.9% last week) and the odds of a 25 bp hike are 15% (up from 10.7% last week & nil 2 weeks ago). The 10Yr is currently trading @ 4.36%.
SOFR Option Vols were lower across the board this week (see attached spreadsheet).