FI option trade remained mixed Thursday though upside call and call spread buying lead volumes as underlying Eurodollar and Treasury futures continued to march higher. Notably, yield curves recovered from early flattening to steeper (2s10s +2.024 at 29.763 vs. 22.474 low) as the short end unwound Wednesday's more aggressive rate hikes from additional three to four 50bps hikes by year end to two over the next two FOMC meetings.
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Investment-grade corporate credit risk climbs back near early session highs as stocks trade weaker into the FI close.
The recent EURJPY pullback from 137.53, Mar 28 high appears to be a correction and the move lower has allowed an overbought condition to unwind. Support to watch is 133.94/90, the Mar 28 low and the 20-day EMA. A break would open 133.15, the Feb 10 high. The primary trend remains up and the bull trigger is 137.50/53. Clearance of this hurdle would expose 138.62, the Aug 25 2015 high.