EURUSD TECHS: Approaching Trendline Resistance

In another instance of an ECB Governing Council member expressing a patient view on further rate hikes, Latvia's Kazaks told Bloomberg on the sidelines of the Sintra symposium that the de-escalation in the US-Iran conflict has reduced the impetus for more tightening.

• “Currently there’s no need to be forceful in our response to inflation...the shock was small so far, without risks of nonlinearities and large second-round effects in the labor market.”
• He doesn't rule out further tightening: “If things improve, the probability of not hiking further is not zero."
• But “we’ll see what the data will tell us...it’s currently still way too hard to say what we’re going to do in July, let alone September. But the urgency of consecutive moves has decreased significantly.”

SOFR & Treasury options trade outlined below: mixed flow segued to upside call buying (on lighter volume). Underlying futures moderately lower heading into month/quarter end. Projected rate hike pricing gained slightly vs. late Monday levels (*): Jul'26 at +8.4bp (7.7bp), Sep'26 at +20.5bp (+19.5bp), Oct'26 at +26.4bp (+24.4bp), Dec'26 +35.3bp (+33bp).

• SOFR Options:
  • Update: +15,500 SFRZ6 95.62/95.75/96.06/96.18 put condors, 4.75
  • +4,000 SFRQ6 96.18/96.25/96.31 call flys, 1 ref 96.09
  • +5,000 3QQ6 96.37/96.62/96.75 1x3x2 call flys, +3 ref 96.24
  • +4,000 2QZ6 96.87 calls, 6.5 vs. 96.285/0.17%
  • -1,000 SFRZ6 96.12 straddles, 40.5 ref 95.97
  • +5,000 SFRZ6 96.25/96.62 call spds, 4.75 ref 95.965
  • +2,000 SFRM7 96.75/97.00 call spds, +3.0 ref 95.975
  • 7,000 SFRZ6 95.75 puts, 9.5
  • +1,500 SFRQ6 96.12/96.18/96.25 call flys, 1.0 ref 96.115
• Treasury Options:
  • +8,500 USQ6 115/117 call spds, 16
  • 3,000 FVV6 106/108 strangles ref 107-03.75
  • 3,500 wk3 TY 109.75/110/110.25 iron flys (exp 7/17)
  • 1,500 FVQ6 106.5 puts, 7.5 ref 107-05
  • 5,300 TYQ6 109/111 strangles, 20 ref 110-01.5
  • 4,000 FVU6 108 calls, 15.5
  • 1,100 FVU6 105.25 puts, 4 ref 107-09
  • Block, 1,000 TUQ6 103.5 calls, 2.5 vs. 103-04.12
  • -6,000 TYQ6 109/110 put spds, 15 ref 110-10

IRAN'S TOP NEGOTIATOR QALIBAF SAYS CURRENT MEETINGS HELD BY IRAN ARE AIMED AT FULFILLING MOU COMMITMENTS - RTRS
• IRAN'S TOP NEGOTIATOR QALIBAF SAYS IRAN WILL NOT ENTER FURTHER NEGOTIATIONS UNTIL CONDITIONS IN MOU ARE MET
• IRAN'S TOP NEGOTIATOR QALIBAF SAYS IT HAS BEEN DECIDED THAT IRAN, U.S., LEBANON ESTABLISH A COMMITTEE TO OVERSEE THE END OF WAR IN LEBANON
• IRAN'S TOP NEGOTIATOR QALIBAF SAYS IRAN HAS EXPORTED OVER 40 MLN BARRELS OF OIL SINCE END OF MARINE BLOCKADE
• IRAN'S TOP NEGOTIATOR QALIBAF SAYS IRAN WILL NEVER COMPROMISE ON ITS RIGHTS IN THE STRAIT OF HORMUZ
• IRAN'S TOP NEGOTIATOR QALIBAF SAYS PASSAGE WITHOUT COST IN THE STRAIT OF HORMUZ IS ONLY FOR 60 DAYS PER MOU
• IRAN'S TOP NEGOTIATOR QALIBAF SAYS SOVEREIGNTY OF THE STRAIT OF HORMUZ LIES WITH IRAN AND OMAN AND TRAFFIC IN THE STRAIT IS ACCORDING TO THE ARRANGEMENTS THAT IRAN SPECIFIES