Looking to the Futures
Treasuries Rally as War Risk and Oil Shock Fears Rise
The 10-year Treasury note ticked higher to start the week after Fed Chairman Jerome Powell outlined his thoughts on interest rates and inflation. The war in the Middle East could lead to fuel shortages that would slow global economic growth and tamper inflation. The Strait of Hormuz is responsible for nearly 20% of the world’s oil and gas flows, and its closure has caused significant supply concerns.
Fed Chair Jerome Powell spoke on Monday and highlighted the FOMC's belief of reaching the 2% inflation goal. Powell explained that these inflation targets could keep the Fed from raising interest rates but emphasized it was too early to know the economic effects from the Iran war.
US and Israeli forces continued attacks in Iran yesterday as the war enters its fifth week. Iran responded with multiple drone and missile strikes in Saudi Arabia and Kuwait. Over the weekend President Trump stated he wants to take Iran's oil and sieve the export hub of Kharg Island, which could involve US ground troops and drastically escalate the conflict.
Crude oil prices continue to rally as supply concerns from the closure of the Strait of Hormuz have raised significant energy concerns. Iran's attacks on shipping in the waterway has prevented exports from the region and forced Gulf producers to decrease output. Iran looks to control shipping transit through the Strait of Hormuz, asking vessels to provide lists of crew and cargo, with specific transit details if ships want to travel through the Strait. Goldman Sachs reported that crude prices could exceed 2008 levels if flows through the Strait of Hormuz remain depressed through March.
Global bond yields were lower on Monday with the 10-year US Treasury note falling -9.7 bp to 4.33%. The 10-year German bund yield dropped -5.5 bp to 3.039% and the 10-year UK gilt yield fell -4.6 bp to 4.928%.
Technicals
Looking at the daily chart for the 10-Year US Treasury Note June 2026 (/ZNM26) contract we can see the contract found some support during yesterday’s trading. Last Friday the contract hit its lowest level in nearly 10 months. The 20-day Simple Moving Average crossed the 50-Day and 100-day SMA price points over the past 2 weeks, which could indicate additional volatility moving forward.
The Daily Technical Summary from Hightower Research has support levels at 109-300 and 109-180 with resistance levels at 110-155 and 110-215.
According to the CFTC Commitment of Traders report released March 24th, asset managers decreased their long position by -68,544 contracts and decreased their short position by -21,697 contracts. Asset managers were net long 2,040,423 contracts as of the time the report was published.
The 14-Day Relative Strength Index at 42.96% indicates more sellers than buyers but the contract has not moved into oversold territory.
20-Day SMA 111-175
50-Day SMA 111-310
100-Day SMA 112-075
14-Day RSI 42.96%
Implied Volatility 7.32%
Contract Specifications
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