OIL: CPC Blend Strengthens as EU Demand Rises
Discounts of CPC crude narrowed by almost $1/b since late December amid fresh demand from European refineries, traders told Bloomberg.
- The CPC grade is now trading at discounts of $1.20-$1.30/b versus Dated Brent.
- This compares to a discount of $2.35/b for a deal on Dec. 20 in the Platts MOC.
- Strength in CPC is also in line with rising North Sea grades.
- Better refining margins and a possible drop in flows from the USGC prompted refineries to secure CPC supplies, Bloomberg said.
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US TSYS: Early SOFR/Treasury Option Roundup
Option desks report mixed SOFR & Treasury option flow overnight, modest volumes on net picking up slightly in 10Y Tsy options as NY desks slowly populate. Underlying futures are near recent overnight lows, curves bear steepening (2s10s +1.429 at 8.891), while projected rate cuts into early 2025 are looking steady to slightly lower vs. late Monday (*) as follows: Dec'24 cumulative -21.5bp (-21.5bp), Jan'25 -27.4bp (-27.9bp), Mar'25 -44.3bp (-44.8bp), May'25 -53.4bp (-54.6bp).
- SOFR Options:
- 2,000 0QG5 95.87/96.12/96.25 broken put trees vs. 0QH5 95.75/96.12/96.25 broken put trees
- 2,000 SFRG5 95.81/95.87 put spds ref 95.87
- 1,500 SFRM5 96.75/97.12 call spds vs. 2QM5 97.25/97.62 call spds
- 1,500 SFRH5 95.50/95.62/95.68/95.81 put condors ref 95.875
- 3,100 SFRH5 95.75/95.93/96.12 call flys ref 95.885
- Treasury Options:
- over 5,100 TYF5 108 puts
- 2,000 USF5 112/126 strangles, 3 ref 118-25
- 2,000 TYG5 108.5/109.5 put spds ref 110-30
- 1,000 USH5 116 puts, 110 ref 118-27
- 1,700 TYG5 109/107 put spds vs. 113/115 call spds ref 111-00.5
- 5,000 TYF5 112.25/112.5/112.75 call flys ref 111-03 to -03.5
- 2,000 TYF5 112.5/112.75 call spds ref 111-07
GILT PAOF RESULTS: The PAOF for the 0.75% Nov-33 linker was not taken up.
- GBP375.0mln hasd been available.
- This leaves GBP18.110bln in issue.
SNB: MNI SNB Preview - December 2024: Further Easing Coming
EXECUTIVE SUMMARY:
- The SNB is expected to cut its policy rate again, with a regular 25bps cut to 0.75% appearing the most likely outcome but an outsized 50bps move also remains possible. Market pricing between the two remains finely split
- There will therefore likely be a downward revision to September’s updated inflation projection, regardless of it being conditional on any new policy rate
- Focus should be on any change to FX communications – although while CHF has been volatile, the currency overall stands at similar real levels to September
- As in that last meeting, the SNB has unusually clearly hinted at further easing to come, so attention will also be on any commentary towards potentially negative terminal rates in President Schlegel’s first press conference
FOR THE FULL PUBLICATION PLEASE USE THE FOLLOWING LINK: https://media.marketnews.com/SNB_Preview_2024_12_b18314e27e.pdf
