STIR: Danske Bank Recommend Buying Oct-25 Euribor
Jun-04 14:20
Danske Bank “see a strong case for positioning towards a swifter pace of [ECB] policy easing”, and recommend buying the Oct-25 Euribor future at an indicative mid of 98.20. They set a soft target of 98.35 and a stop-loss of 98.10.
- “Markets have over the past few weeks consistently priced some 48bp worth of cuts between Jun 25 and Oct 25, which implies an additional Euribor 3M drop of only 23bp beyond the June meeting”
- They note that “price pressures show broad-based signs of easing, driven by service inflation especially moving lower to 3.2%”.
- Additionally, “the ECB could remain cautious as sentiment around US-EU trade negotiations has improved, but we think that a risk-management approach favours extending the back-to-back cutting cycle for a bit longer – especially as the headwinds to growth now seem to be broadening from manufacturing towards services, wage growth is swiftly declining, and medium-term market-based inflation expectations remain below 2%”.
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EUR: More FX Exchange traded Options
May-05 14:20
- EURUSD (9th May) 1.1400p, sold at 0.0079 and 0.0071 in ~2k Total.
- EURUSD (6th June) 1.1350p, bought for 0.012 in 2.4k.
OPTIONS: Expiries for May06 NY cut 1000ET (Source DTCC)
May-05 14:20
- EUR/USD: $1.1275(E508mln), $1.1325(E717mln), $1.1400(E632mln), $1.1500-10(E2.2bln)
- GBP/USD: $1.2980-90(Gbp545mln)
- USD/JPY: Y142.00($1.1bln), Y144.50-55($638mln), Y146.00($1.9bln)
- EUR/GBP: Gbp0.8500-05(E535mln)
- AUD/USD: $0.6300(A$813mln), $0.6500(A$702mln)
- USD/CAD: C$1.3815-30($874mln)
- USD/CNY: Cny7.3000($1.5bln)
STIR: SOFR Option Update: Leaning Bearish
May-05 14:16
Short end underlying rates trading at/near post ISM services data lows, projected rate cut pricing steady to mildly lower vs. morning levels (*) as follows: May'25 steady at -0.5bp, Jun'25 at -8.2bp (-8.4bp), Jul'25 at -23.8bp (-25.5bp), Sep'25 -43.8bp (-46.9bp).
- -10,000 SFRU5 96.43/96.62 call spds, 3.25
- +4,000 SFRU5 95.75/95.87 2x1 put spds, 0.5 ref 96.14
- 2,000 SFRH6 97.18/98.25 call spds vs. 0QH6 97.25/98.25 call spds, 2.5 net/0QH6 over
- +2,500 SFRH6 97.50/98.00 call spds, 7.5 ref 96.67
- +5,000 SFRN5 95.75/95.87 put spds 2.0 vs. 96.195/0.05%
- +4,000 0QM5/0QU5 97.00/97.50/98.00 call fly spd, 0.5 net
