EM ASIA CREDIT: Bangkok Bank: new USD deal Launch

• An early look at analyst unrounded core CPI estimates for Friday’s delayed September release sees a median estimate of 0.30% M/M, with a reasonably wide range of 0.25-0.36% M/M.
• As such, core CPI inflation is mostly expected to moderate from the 0.35% in August although it would be a third consecutive strong month after the 0.32% in July as well.
• Indeed, if accurate, it would leave there having been only two months in the past twelve with a monthly rate equivalent to less than 2% annualized (March and May). That sets it up for a more clearly cut 3.1% Y/Y after accelerating to 3.06% in August.
• Of course, the Fed targets PCE inflation, with a median of the five forecasts for core PCE also at 0.30% M/M for September. In contrast to core CPI, this would be an acceleration after 0.23% M/M in August and 0.24% in July (prior to revisions, which should be more extensive being part of the annual update).
• It's still only seen two months in the past twelve with monthly inflation below 2% annualized (March and November) whilst annual core PCE inflation was still elevated at 2.9% Y/Y in August. The median FOMC member sees this accelerating further to an average 3.1% Y/Y in Q4 before moderating to 2.6% Y/Y in 4Q26 and 2.1% Y/Y in 4Q27. 

Rather modest SOFR/Treasury option volumes to report Monday, as the US Gov enters shutdown day 19. No data and the Fed in policy blackout. Underlying futures modestly higher (TYZ5 113-19 +4) while US$ index pares modest gains in late trade. Projected rate cut pricing cools slightly vs. late Friday levels (*): Oct'25 at -24.7bp (-25.3bp), Dec'25 at -50bp (-50.9bp), Jan'26 at -63.7bp (-64.8bp), Mar'26 at -77bp (-77.9bp).

• SOFR Options:
  • 3,200 SFRM6 96.25/96.62/97.00 vall flys ref 96.87
  • 2,000 SFRH6 96.37 puts, 4.0
  • over +12,500 SFRZ5 96.12 puts, 0.5 ref 96.365/0.05%
  • +2,500 SFRX5 96.75/96.87 call spds, cab
  • -4,000 SFRZ5 96.25/96.37 call spds, 8.5
  • +2,000 SFRM6 96.25/96.37 put spds, 2.0 ref 96.87
  • 1,600 SFRH6 96.31/96.43 put spds
  • 1,500 SFRM6 96.25/96.62/97.00 call flys
  • +8,000 SFRG6 96.68/96.81/96.87/97.00 call condors, 1.75 ref 96.625 to -.63
• Treasury Options:
  • 1,560 USX5 116.5/117/118 broken put flys ref 118-24
  • 6,000 TUZ5 104.25 puts, ref 104-13.75
  • 9,000 TYZ5 113.5/114.5 call spds, 6 ref
  • 10,000 TYZ5 113.5/114.5 2x1 call spds vs. TYZ 112.5 puts
  • Update, total -6,000 TYF6 113.5 straddles, 163-200 vs. 113-09 to -13.5/0.06%
  • 2,000 TYX5 114/115.5 call spds, 5 ref 113-16
  • 2,500 FVF6 110/111.5 call spds ref 1109-27.5
  • over 5,000 TYX5 113.5/118 call spds on ratio
  • over 5,000 FVX5 109.5 puts, 5.5 last
  • 5,900 TYX5 113 puts, 7-8 ref 113-13.5/0.08%
  • -5,000 TUZ 104.75 calls, 5 ref 104-13
  • +3,000 TYH6 107.5/109 put spds, 6
  • 3,000 TYF6 110/112 put spds, 23 vs. 113-11/0.20%

• RES 4: 180.33 Top of a bull channel drawn from the Feb 28 low  
• RES 3: 180.00 Psychological round number
• RES 2: 178.94 1.236 proj of the Jul 31 - Sep 29 - Oct 2 price swing
• RES 1: 177.94 High Oct 10 and the bull trigger   
• PRICE: 175.52 @ 17:15 BST Oct 20
• SUP 1: 175.19 20-day EMA
• SUP 2: 173.92 Low Oct 6 and a gap high on the daily chart 
• SUP 3: 173.24 High Oct 3 and a gap low on the daily chart   
• SUP 4: 172.27 Low Oct 2 and a key medium-term support  

The trend structure in EURJPY is bullish - moving average studies are in a bull-mode position highlighting a dominant uptrend. Recently, the cross cleared resistance at 175.13, the Sep 29 high to confirm a resumption of the uptrend. A reversal higher would open 175.00, a Fibonacci projection. First key support to watch lies at 175.19, the 20-day EMA - a level pierced on Friday. A clear breach of it would signal scope for a deeper retracement.