EM LATAM CREDIT: Honduras: Presidential Transition – Neutral
(HONDUR; B1/BB-neg/NR)
• Despite allegations of electoral fraud, the leftist government of Xiomara Castro finally agreed to a peaceful transition of power to the declared winner of the Honduras presidential election, conservative Nasry Asfura.
• HONDUR Nov. 34s at $114.27, up 1 point YTD and 4 points since September 30, 2025, had already discounted the victory and were unfazed by the fraud allegations. At a yield of 6.44%, G-Spd 231bp, the bonds were quoted lower than much higher rated Colombia sovereign (COLOM; Baa3/BBneg/BB) Feb 2034s at 6.6%, G-Spd 253bp.
• S&P may change its outlook to stable from negative soon as this encouraging peaceful transition of power decreases political uncertainty, a concern they had cited in a Sept. 2025 report prior to the election.
• President Trump was supportive of President-elect Asfura so it is likely Honduras will benefit from that friendship as other allies in the region such as Argentina, El Salvador and Ecuador among others have seen.
• The IMF expects 3.5% GDP growth, helped by strong remittances and export growth, and 4.2% inflation for 2026. The results of a fourth review of an IMF 3-year Extended Fund Facility (EFF) allowed a disbursement of $120mn. They seemed pleased with a 1.5% fiscal deficit target for 2025 and a $9.7bn international reserves position. Gross debt/GDP has been steadily declining with 2025 expected to end at a relatively low 45%. Concerns from the IMF and rating agencies continued to be corruption and low per-capita GDP.
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COMMODITIES: Crude Rises Amid Sanction Threat, Silver Extends Gains
- Crude markets have found support from US plans to introduce further Russia sanctions if Putin does not agree to a peace deal, alongside a US move to blockade all sanctioned tankers from leaving and entering Venezuela.
- WTI Jan 26 is up by 1.4% at $56.1/bbl.
- The US is considering options such as targeting shadow fleet vessels used to transport Russian oil, as well as traders who facilitate the transactions, Bloomberg reports.
- The Venezuela blockade comes amid an escalating campaign by the Trump administration that has included a ramped-up military activity in the Caribbean.
- Despite today’s gains, a bearish theme in WTI futures remains intact. A key support and the bear trigger at $55.99, the Oct 20 low has been breached, opening $53.53.
- On the upside, initial resistance is at $59.14, the 50- day EMA.
- Elsewhere, precious metals have also risen today amid the escalating tensions between the US and Venezuela. While gold is up by 0.7% at $4,333/oz, silver has notably outperformed, with price currently 4.1% higher at $66.3/oz.
- Silver remains supported by a continued squeeze in physical markets, which has seen price rise ~10% since Nov 4 lows.
- From a technical perspective, a bullish theme in gold remains intact, with attention on key resistance and the bull trigger at $4,381.5, the Oct 20 high.
- For silver, today’s extension reinforces the current bull theme, with sights on $68.397 next, a Fibonacci projection.
US TSYS: Late SOFR/Treasury Option Roundup: Mixed Positioning
SOFR & Treasury options remained mixed, two-way on directional and vol structures on net ahead Thursday's heavy data (claims, CPI, TICS) and policy docket 4 central banks: Riksbank, Norges, BOE and EU. Underlying futures off early lows - near steady in 10s to mildly weaker in the short and long ends. While rates pared losses - projected rate cut pricing has gained some momentum vs. early morning levels (*): Jan'26 at -6.1bp (-5.5bp), Mar'26 at -15.2bp (-14.4bp), Apr'26 at -21.6bp (-20.5bp), Jun'26 at -35bp (-33.7bp).
- SOFR Options:
- +6,000 SFRG6 96.31/96.37 put spds, 1.25
- -5,000 SFRM6 95.87 calls, 74.5 vs. 96.62/0.99%
- -6,000 SFRU6 96.12/96.50 3x1 put spds, 1.5 ref 96.835
- +4,000 SFRF6/SFRG6 96.31/96.37/96.43 call fly strip, 3.5 total
- Block, +10,000 SFRZ6 97.00/98.00, 16.75 net vs. 96.87/0.32%
- -15,000 SFRM6 97.00/97.50 call spds, 4.0 ref 96.685
- over 12,500 SFRF6 96.62 calls, 1.75 last
- 8,476 SFRF6 96.50/96.56/96.81 broken call trees
- Block, 2,500 0QG6 96.68/96.81/96.87/96.93 put condors ref 96.87
- over 4,000 SFRH6 96.25/96.37/96.43/96.50 broken put condors
- 1,500 SFRH6 96.56 calls ref 96.465
- +2,500 SFRU6 97.00/97.25/97.50 call flys, 2.25 ref 96.83
- Treasury Options:
- -10,000 TYG6 111.5/113.5 strangles, 28
- Block/screen +17,100 TYF6 112.5 straddles, 32
- +5,000 TYG6 114/115 call spds, 5
- +5,000 wk1 TY/TYG6 112.5 call spds, 17
- -10,000 TYF6 112 puts, 8
- -5,000 wk3 TY 112.75/113.25/113.5 broken call fly seller, 2
- +5,000 TYF6 113.5 calls, 3 ref 112-11
- +2,500 TYG6 114 calls, 10
- -2,500 TYF6 111.25/112.75 put spds, 26
- +1,500 TYF6 112/112.5 2x1 put spds, 7 ref 112-11.5
- +1,500 TYG6 113/114.5 call spds, 17 ref 112-12
- over 5,300 TYF6 113 calls, 6 (large buyers in low delta calls over last week)
- over +12,300 TYF6 113.5 calls, 2-3
- +3,000 TYF6 110.5 puts, cab-7
- 2,500 TYF6 112.25 puts, 12 ref 112-13
USDJPY TECHS: Support At The 50-Day EMA Remains Intact
- RES 4: 158.87 High Jan 10 and a key resistance
- RES 3: 158.29 2.618 projection of the Sep 17 - 26 - Oct 1 price swing
- RES 2: 158.00 Round number resistance
- RES 1: 156.95/157.89 High Dec 9 / High Nov 20 and bull trigger
- PRICE: 155.50 @ 16:33 GMT Dec 17
- SUP 1: 154.03 50-day EMA
- SUP 2: 153.62 Low Nov 14
- SUP 3: 152.82 Low Nov 7
- SUP 4: 151.54 Low Oct 29
The latest pullback in USDJPY appears corrective. The trend condition remains bullish and this is highlighted by moving average studies that are in a bull-mode position. Support to watch lies at 154.03, the 50-day EMA. A clear breach of this average would undermine the bull theme and signal scope for a deeper corrective pullback. For bulls, a resumption of gains would open 158.00.
