OPTIONS: Flurry Of Sonia Call Structure Buying After Hawkish BOE

Tuesday's Europe rates/bond options flow included:

• OEQ5 117.25/117.50cs sold at 12 in 8k
• RXQ5 128.50/127.50 put spread 3K given at 15.
• RXQ5 130.5/131.5cs vs 128p, bought the cs for 3 in 2k.
• ERZ5 98.3125/98.4375/98.5625c fly vs 97.9375p, bought the fly for flat in  3.5k.
• ERZ5 98.00/97.9375ps, bought for 1.5 in 3k.
• ERM6 98.375/98.25/97.9375p ladder, bought for flat up to half in 9k
• SFIZ5 96.15p x2 vs 96.50c x1, sold the Call at -2.75 in 4k
• SFIH6 96.80/97.00 call spread paper paid 3.75 on 5K

• US TSY 3Y AUCTION: NON-COMP BIDS $150 MLN FROM $58.000 BLN TOTAL

• President Trump states that August 01 is not a change of deadline, it’s a clarification and that the incentive remains for countries to deal in the US. Trump believes the administration is picking out low and fair tariff numbers, with most rates lower than what the US is being charged. Trump reiterates his prior threats on a 10% tariff for nations in BRICS, saying that anybody in BRICS will be getting that charge pretty soon.
• Moving onto the dollar, Trump states that if people want to challenge dollar, they'll pay price.
• On negotiations with the EU, Trump says the EU was much worse than China in dealing with, but that Von Der Leyen has been very nice recently and that a letter to the EU is probably two days away.
• Regarding some other letters, Trump says “we have some 60, 70%. Those are ones with massive you know, where we have massive trade deficits because they've treated us very badly. But I would say in every case, I'm treating them better than they treated us over the years.
• Trump says that the administration could have been much harsher on trade, and that they have the ability to go higher with tariffs.