EM LATAM CREDIT: Compañía General de Combustibles (CGC): New 5NC2 Launch

• Treasuries holding narrow, higher range since gaining early Tuesday - apparently sensitive to a couple social media posts by Pres Trump while stocks dipped too after he posted retribution on Hamas if they continue "to act badly, in violation of their agreement with us."
• Second half risk-off coincided with Pres Trump expecting "$20T in US until year end", while Trump anticipates having "a good deal with Xi"  the meeting in S Korea at end of the month may NOT happen.
• Currently, the Dec'25 10Y contract trades +5.5 at 113-24.5 vs 113-27.5 high. Moving average studies are in a bull-mode position and this set-up continues to highlight a dominant uptrend. Sights are on 114-10, the Apr 7 high (cont) and the next key resistance. Firm support lies at 113-01+, the 20-day EMA.
• Projected rate cut pricing steady to mildly mixed vs. late Monday levels (*): Oct'25 at -24.2bp (-24.7bp), Dec'25 at -49.2bp (-50bp), Jan'26 at -64.2bp (-63.7bp), Mar'26 at -78.2bp (-77bp).
• Stocks remain mixed late Tuesday, the DJIA outperforming after managing to mark a new record high of 47,125.66 in the first half. Reporting earnings after the close: Netflix, Capital One Financial, Mattel, Western Alliance Bancorp (in the hot seat last week after announcing bad loan losses), Omnicom, EQY and Texas Instruments.
• Precious metals sold off sharply on Tuesday, with spot gold currently down by 5.6% at $4,113/oz and silver down by 7.7% at $48.4/oz, albeit off session lows. Platinum and palladium have also fallen by 5-6%.

• RES 4: 0.6726 1.236 proj of the Jun 23 - Jul 24 - Aug 21 price swing
• RES 3: 0.6660/6707 High Sep 18 / 17 and a bull trigger
• RES 2: 0.6629 High Sep 30 & Oct 01 and key short-term resistance
• RES 1: 0.6548 50-day EMA
• PRICE: 0.6486 @ 15:45 BST Oct 21
• SUP 1: 0.6440 Low Oct 14
• SUP 2: 0.6415 Low Aug 21 / 22 and a bear trigger
• SUP 3: 0.6373 Low Jun 23
• SUP 4: 0.6357 Low May 12  

AUDUSD is in consolidation mode. Price action on Oct 14 continues to highlight a possible reversal pattern - a hammer candle. It signals the end of the bear cycle that started Sep 17. Note that MA studies have remained in a bull-mode position during the latest bear leg, highlighting a dominant M/T uptrend. Initial resistance is 0.6548, the 50-day EMA. A breach of 0.6440, the Oct 14 low, would cancel the reversal signal and reinstate a bear threat.       

SOFR/Treasury options trade mixed on modest volumes Tuesday as the US Gov enters shutdown day 20. Underlying futures modestly higher (TYZ5 113-23.5 +4.5) while US$ firmer. Projected rate cut pricing steady to mildly mixed vs. late Monday levels (*): Oct'25 at -24.2bp (-24.7bp), Dec'25 at -49.2bp (-50bp), Jan'26 at -64.2bp (-63.7bp), Mar'26 at -78.2bp (-77bp).

• SOFR Options:
  • -5,000 SFRZ5 96.25/96.37/96.50/96.62 call condors, 7.25 vs. 96.37/0.10%
  • -3,000 SFRH6 96.50 straddles, 31.75 vs. 96.65/0.32%
  • -2,000 SFRZ5 96.25/96.50/96.75 call flys. 9.5 ref 96.38
  • +5,000 3QM6 96.00/97.50 put over risk reversals, 1.5
  • -2,500 2QM6 96.37/97.37 call over risk reversals, 0.5 vs. 96.875/0.45%
  • +1,000 2QH6 96.93 straddles, 44.0 vs. 96.875/0.04%
  • +5,000 SFRX5 96.12/96.25 2x1 put spds 0.5 ref 96.375
  • 13,000 SFRX5 96.75/96.87 call spds, cab
  • -3,000 SFRZ5 96.50/96.62 call spds, 1.25
• Treasury Options:
  • Block: 6,750 USZ5/USF6 123 call spds, 25 vs. 473 TYZ5 at 119-11
  • 8,000 USZ5/USF6 111 put spds, 8
  • Block, 11,640 USZ5 110/USF6 111 put diagonal/calendar spread, 10 net
  • 3,525 TYZ5 114/114.5 call spds vs. 113/113.5 put spds ref 113-24
  • 5,000 TYZ5 114/116 call spds call spds 28 ref 113-26
  • 2,000 TYZ5 113/114 put spds, 29 ref 113-24.5
  • 2,000 TYZ5 114/115.5 2x3 call spds ref 113-26
  • 3,000 TYZ5 114 calls, 39 ref 113-25
  • 1,500 TYX5 112.75/113.5/114.5 broken call flys
  • 2,500 TYG6 111/116 3x1 put over risk reverals (putx3)
  • 3,000 TYF6 116/117.5 call spds vs. 2,000 TYF6 114.5 calls ref 113-16.5
  • -1,500 TYZ5 113.5 calls, 43 vs. 113-16.5/0.52%
  • 1,800 TYF 111.5/115.5 strangles ref 113-16.5
  • +4,300 TYZ5 115.5 calls, 14 vs. 113-29/0.15%
  • +2,000 TYX5 114/114.25/114.5 call flys, 2 vs. 113-24/0.08%
  • 2,000 TYX5 113.25/113.75 1x2 call spds, 6 ref 113-20.5