TWIFO 180: Metals Mysteries and Yield Curve Conundrums

TWIFO 180: Metals Mysteries and Yield Curve Conundrums HOST: MARK LONGO, THE OPTIONS INSIDER MEDIA GROUP CME HOTSEAT GUEST: ERIK NORLAND - EXECUTIVE DIRECTOR AND SENIOR ECONOMIST WHAT WERE THE MOVERS AND SHAKERS IN FUTURES OPTIONS THIS WEEK? RECENT CME RESEARCH METALS   QUESTION FROM MELTIM: Do you buy that metals only selloff when the calls are bid?   QUESTION FROM ELION: Any follow up data on the cme metal skew study? I find that one somewhat perplexing. Gold and Silver Options Pointing to a Pullback https://www.cmegroup.com/education/featured-reports/gold-and-silver-options-pointing-to-a-pullback.html Silver and gold options achieved exceptionally positive skewness late this summer. Exceptionally positive options skewness often precedes corrections. Even as of mid-October, gold and silver options skews remain unusually positive. Industrial Metals: Can Demand Meet Supply Challenge  https://www.cmegroup.com/education/featured-reports/industrial-metals-can-demand-meet-supply-challenge.html Two decades ago, the main problem in base metals markets was insufficient supply to meet rising demand, particularly from China. As a result, prices soared. Copper prices rose 440% between 2000 and 2011. For aluminum, prices doubled between 2000 and 2008 despite a growth in supply. RATES/YIELD CURVE Which Yield Curve Foretells Growth Best?  https://www.cmegroup.com/education/featured-reports/which-yield-curve-foretells-growth-the-best.html The private sector US yield curve remains inverted while the public sector curve flipped positive. Private sector yield curves have been better indicators of growth in the past 20 years. Yield curves misfired in the mid-1990s, predicting a slowdown that didn't happen. Soaring equities could enable the economy to defy the yield curves' suggestion of slower growth ahead. A larger budget deficit, however, could make it harder for the US government to fight off any slowdown.  What Global Yield Curves Signal About 2020 Growth - https://www.cmegroup.com/education/featured-reports/global-growth-outlook-for-2020.html Yield curves are pointing to stronger growth in China, India, Chile and Brazil. Yield curves are pointing towards sharp slowdowns in the US, eurozone, Japan and Israel. All 23 yield curves examined have a positive correlation with growth 3-5 quarters in the future. There is a wide variance in the forecasting accuracy among the yield curves. FUTURES OPTIONS FEEDBACK QUESTION FROM DM75: What are you expecting when bitcoin options launch on cme next year? Happy Holidays to the OIR crew. You guys are the best.