PERU: Agreement Reached To Strengthen Ties With Saudi Arabia, Velarde Presser
Sep-19 11:49
- According to a statement from the Energy and Mining Ministry, an agreement has been reached with Saudi Arabia to strengthen ties in the metals sector. The announcement was made as officials from both countries are said to be holding talks to reach a memorandum of understanding to boost bilateral cooperation. According to Bloomberg, the government is hoping that new projects in the metals sector will help to increase the production of critical minerals that are needed for the energy transition.
- Today, the macro calendar is clear, with the next scheduled release not until Sep CPI stats are released on Oct 1. Meanwhile, the BCRP has reported that exports rose by 14.8% y/y in the Jan-July period, reaching $47.2bn. In July alone, exports were up by 4.3% y/y to $7.2bn, mainly on the back of strong gains in export prices. The trade surplus reached $2.1bn in July, taking the 12-month balance to $26.4bn, up $6.3bn on the same period a year ago.
- Separately, BCRP Governor Julio Velarde is due to hold a press conference at 1700BST(1200ET) today. Last week, the central bank delivered a 25bp rate cut to 4.25%, maintaining a data dependent stance, but emphasising that the interest rate is now “very close to the level estimated as neutral”.
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US TSYS: Early SOFR/Treasury Option Roundup: Oct'25 10Y Calls Ongoing
Aug-20 11:45
SOFR and Treasury options volume gaining ahead of the NY open, large Oct'25 10Y call interest carries over from Tuesday, Sep Tsy option positioning/unwinds ahead of Friday's expiration. SOFR option flow more paired. Underlying futures trading steady to mildly higher (off highs after MBA apps data). Projected rate cut pricing retreat slightly from late Tuesday (*) levels: Sep'25 at -21.1bp (-21.7bp), Oct'25 at -34.9bp (-35.1bp), Dec'25 at -54.1bp (-54.4bp), Jan'26 at -65.1bp (-65.6bp).
- SOFR Options:
- 8,000 SFRU6 96.75/97.25 2x1 put spds ref 96.805
- 1,400 SFRZ5 96.25/96.37/96.50/96.62 call condors ref 96.21
- Block, 4,500 SFRZ5 96.25/96.50/96.75/97.00 call condors, 6.0 ref 96.21
- 6,000 SFRU5 96.00/96.12/96.25 call flys ref 95.90
- 4,000 SFRU5 95.87/95.93 put spds ref 95.90
- Treasury Options: (reminder Sep options expire Friday)
- Block/screen, over 10,800 TYU5 111 puts, 2 vs. 111-22.5/0.08%
- over 5,600 TYU5 112 calls, 8 last
- over 5,300 TYU5 112.5 calls, 2 last
- over 92,600 TYV5 113 calls, 20-23 ref 111-24.5 to -25.5 (78k trade Tuesday)
OUTLOOK: Price Signal Summary - Trend Needle In Gilts Points South
Aug-20 11:44
- In the FI space, a bear threat in Bund futures remains present. The contract traded sharply lower Friday resulting in a breach of 128.84, the Jul 25 low and bear trigger. Note that the 129.00 handle marks the base of a broad range and a clear range breakout would strengthen a bearish threat. This would open 128.40 initially, the Apr 9 low. Strength above the 50-day EMA of 129.89, is required to signal a reversal. Resistance at the 20-day EMA is at 129.58.
- Gilt futures traded sharply lower last Friday and Monday’s sell-off confirmed a bearish start to the week, strengthening current conditions. The contract has breached key short-term support and a bear trigger at 91.08, the Jul 18 low. This signals scope for an extension towards 90.11, the May 22 low. On the upside, resistance to watch is seen at 91.94, the 50-day EMA. Clearance of this average is required to highlight a potential reversal. First resistance is 91.32, Monday’s high.
US: Zervos Sees Fed Policy as "Quite Restrictive"
Aug-20 11:42
- Jefferies' Chief Market Strategist Zervos speaking on CNBC - says Fed policy is quite restrictive, and balance sheet is no longer a "kicker" for the economy.
- More importantly, Zervos is reportedly on the shortlist of private sector candidates being considered for Fed chair after Powell's departure from the role next year
