EQUITIES: EU Bank stock option trades again

• EURCAD eye yesterday's low at 1.34225.
• A clear break through the latter will open to the 2022 double bottom at 1.33905, which is also the lowest print since May 2015.

Chart source: MNI/Bloomberg

The Swedish parliament has voted in favour of Justice Minister Morgan Johansson remaining seated after a coalition of right leaning opposition parties initiated a vote of no confidence in the minister.

• The government of Prime Minister Magdalena Andersson holds a razer thin margin in the Riksdag and ahead of the vote 174 of 349 lawmakers spoke in favour of Johansson.
• Andersson said that she, and her government, would resign if the vote went against Johansson. A move which would precipitate a political crisis during a critical period for Swedish security as the government tries to navigate a Turkish blockade of Stockholm's NATO bid.
• The deciding vote was cast by Amineh Kakabaveh the independent member of parliament of Iranian Kurdish descent whose vote also confirmed Andersson’s appointment as prime minister last year.
• The crisis appears likely to persist despite the failure of the vote as Sweden grapples with concessions to be made to Ankara on historical and political ties with Kurdish groups.
• Turkey has demanded the extradition of Kakabaveh and although this is highly unlikely is does pose some challenging questions for a government which conceded to demands from Kakabaveh last year to publicly condemn Turkish President Recep Erdogan and voice support for Turkish Kurds in order to form a government .
• In remarks before the vote Kakabaveh said: 'My trust in Morgan Johansson is unbroken.'

Lead quarterly EDM2 dips -0.0025 to 98.2275 after latest 3M LIBOR set' climbs 0.02543 to new 2Y high of 1.69043% (+0.06443/wk). Rate hike pricing moderates slightly out the curve stable: balance of Whites through Golds (EDU2-EDH7) +0.005-0.025 w/ Greens-Blues narrowly outperforming.

• Inversion holds to front Reds: low mkt measure of confidence in Fed managing a soft landing/avoiding recession has extended: Red Sep (EDU3) currently trading 96.56 vs. Red Jun (EDM3) at 96.46. Inversion starts to flatten out (dis-invert) around Blue Sep'25-Dec'25 trading 96.94-.935.
• Monday option roundup: Generally light FI option volume Monday, same for underlying futures (TYU2 <960k by the bell) despite yields grinding to the highest levels since early May (all over 3%: 5YY 3.0368%, 10YY 3.0380%, 30YY 3.1908%).
• No data to start the week (no Fed-speak either w/ Fed in Blackout through June 16). Markets pre-occupied with Elon Musk threat to pull out of Twitter bid due to lack of spam/bot documentation, and UK PM Boris Johnson confidence vote in late trade. Also public Jan 6 insurrection hearing that start June 9.
• No overarching theme to describe Monday's trade, just short term positioning and/or tactical plays, such as a sale of 10,000 TYN 117.5/118.5 put spds at 22 (ref 118-08.5) looking for yields to retrace off current highs. Simple directional plays via buying July 10Y 121, 121.5 and 121.75 calls from 4-2. Scant Eurodollar trade had paper selling 10,000 short Jun 96.62 puts at 19.5 vs. 96.45/0.85%.