SECURITY: Europe-Iran Talks In Geneva Underway Shorty

Some attention on the US Cash Equity Open, given some of the earlier selling in Futures, US Yields are also elevated Today, once again led by the longer end.

• Calls: SPX: 5,898.5 (-0.7%); DJIA: 42,253 (-1.0%/-424pts); NDX: 21,216.7 (-0.7%).

The 10-Year gilt/Bund spread is set to close above 210bp for the first time since April 22.

• Relative betas to U.S. Tsys, hawkish BoE developments and this morning’s firmer-than-expected UK CPI data explaining much of the ~15bp of widening seen since May 6.
• Downtrend resistance drawn off the Dec ’24 closing highs comes in at 214.3bp today, protecting the April closing high (218.8bp).
• The UK’s delicate fiscal situation and stickier-than-expected CPI data presents widening risks to the spread, with the market less worried about the future increase in German issuance in recent weeks.

Fig. 1: UK/German 10-Year Yield Spread (bp)

Source: MNI - Market News/Bloomberg

Few Notable FX Exchange traded Option, all looking for further USD Weakness:

• EURUSD (3rd July) 1.1550c, bought for 0.0082 in ~1k, the Underlying is much higher than the spot at 1.1418.
• JPYUSD (3rd July) 72.00c, bought for 0.63 in 1.9k (underlying is at 70.535).
• CADUSD (3rd July) 73.00c, bought for 0.37 in ~4.16k (underlying is at 72.53).