MNI EXCLUSIVE: Interview With Ex-Richmond Fed President Lacker

SOFR & Treasury call option volumes improved as the session wore on, Tsy options centered on 5- and 10Y puts, SOFR options a little more mixed with carry over in calls from Tuesday - note par call trade and bull curve flatteners outlined below. Projected rate cut pricing has cooled vs. late Tuesday levels (*): Jan'26 steady at -1.2bp, Mar'26 at -4.7bp (-6.1bp), Apr'26 at -8.7bp (-10.7bp), Jun'26 at -19.2bp (-21.7bp). 

• SOFR Options:
  • -2,000 SFRH7/SFRM7/SFRU7 96.75 straddle fly, 0.5 net/belly over
  • 20,000 SFRM6 96.31/96.43/96.56 put trees, 6.75 vs. 96.52/0.05%
  • +25,000 SFRH6 96.37/96.43 call spds vs. SFRM6 96.50/96.56 call spds 1.75 net/Jun over
  • +4,000 0QU6 96.75/97.00/97.12/97.37 call condors, 4.25
  • +2,000 SFRU6 99.00/100.0/101.0 call flys, 0.75 and bid
  • -2,000 SFRM6 96.75/97.00 1x2 call spds, 0.37
  • +1,000 3QH6 96.37 straddles, 22.0
  • +5,000 SFRM6 96.31/96.37 put spds, 2.0 vs. 96.52/0.10%
  • +10,000 SFRH6 96.37/96.43/96.50 call flys, cab ref 96.375
  • 2,600 SFRH6 96.62/97.25 call spds ref 96.385
  • 20,000 0QU6 96.37 puts, ref 96.69
  • 1,750 SFRJ6 96.18/96.31/96.43 put flys ref 96.56
  • +1,000 SFRJ6 96.50/96.62/96.75 1x3x2 call fly
  • +2,500 SFRK6 96.56/96.75 call spds vs. 96.545/0.21%
  • +6,750 SFRU6/SFRZ6 96.31/96.43 put spd spd, 0.5 net / Sep over
  • +3,000 SFRM6 97.00 calls, 3.5
  • +4,000 SFRH6 96.37/96.43/96.50/96.56 call condors, 0.5
  • Block, +4,000 SFRH7 96.75/97.25 call spd vs. 96.37 put, 4 net/call spd over
  • +3,500 SFRH6 96.31/96.43/96.56 put flys 2.25 ref 96.385
  • 1,000 SFRM6 96.31/96.56/96.81 put flys ref 96.555
• Treasury Options:
  • 5,000 USJ6 119 calls, 25 ref 113-20
  • +3,000 TYG6 111.25 puts, 6 ref 111-15.5
  • -1,500 TYH6 111.5 puts, 33 vs. 111-18/0.59%
  • +4,000 TYJ6 111.5 calls vs. 111-10/.47%
  • +7,000 TYH6 109.5 puts, 5
  • +1,600 FVJ6 108.25/109 strangles, 48.5
  • +2,100 TYH6 111 put vs. TYG6 111.5 put spd, 12
  • -2,400 FVH6 108.25/109.25 put spds, 34 vs. 108-22.25/0.43%
  • +1,400 TYH6 110.5/111.5 put spds, 21
  • -2,500 TYG6 112 puts, 30
  • +2,500 TYG6 111.5/112 2x1 put spds 12 vs. 111-13.5/0.05%
  • -10,000 TYH6 110.5 puts, 15 vs. 111-14/0.25%

• Stocks gained earlier after saying he would not use force to acquire Greenland in Davos address -- extended highs late (but still lower for the week) after Pres Trump posts on social media he has a "framework for future deal on Greenland with NATO" adding he "won't impose Greenland-linked tariffs on Feb 1".
• Earlier, Denmark officials said the US challenge over Greenland sovereignty "is still there" while European Parliament formally suspended the trade deal process (Turnberry Deal) after Trump's Greenland threats. Geopolitical risk remains fluid.
• Currently, the DJIA trades up 703.54 points (1.45%) at 49198.28, S&P E-Mini Futures up 102.25 points (1.5%) at 6931.75, Nasdaq up 380.9 points (1.7%) at 23335.47.
• A mix of Information Technology and Financials sector shares led advances in late trade: Intel Corp +10.90%, Sandisk Corp +10.17%, Teledyne Technologies +9.87%, Western Digital +9.75%, Advanced Micro Devices +7.89%, Micron Technology +7.53%, Interactive Brokers Group +7.16%, Citizens Financial Group +7.07%, Fifth Third Bancorp +5.37%, Invesco +5.09%, Regions Financial +4.63%, M&T Bank +3.97% and KeyCorp +3.49%.
• Another standout was Moderna, surging +12.85% on upgrades and positive headlines on it’s cancer vaccine.
• Conversely, Consumer Staples and Utilities underperformed in the first half: Kraft Heinz -6.21%, Target Corp-2.73%, McCormick & Co -2.23% and Hershey Co -1.84% while Sempra -1.72%, Consolidated Edison -1.15%, PG&E Corp -0.98% and Duke Energy -0.28% weighed on the Utilities sector.
• Reminder, a handful of stocks expected to announce earnings after the close include: Prologis Inc, Knight-Swift Transportation, Pinnacle Financial and Kinder Morgan.

• RES 4: 187.36 Bull channel top drawn from the Feb 28 low 
• RES 3: 186.41 2.618 proj of the Jul 31 - Sep 29 - Oct 2 price swing
• RES 2: 185.77 2.500 proj of the Jul 31 - Sep 29 - Oct 2 price swing
• RES 1: 185.57 High Jan 14 and the bull trigger
• PRICE: 185.15 @ 17:37 GMT Jan 21
• SUP 1: 182.63 Low Jan 19
• SUP 2: 182.08 50-day EMA
• SUP 3: 181.57 Low Dec 17 
• SUP 4: 180.50 Low Dec 8 

The strong recovery in EURJPY from Monday’s low highlights the end of the recent 3-day correction. The primary bull trend remains intact and the cross continues to trade above support at 182.21, the 50-day EMA. A clear breach of the average would suggest scope for a deeper retracement. The bull trigger is 185.57, the Jan 14 high. Clearance of this hurdle would resume the uptrend - sights are on 187.36, a bull channel top drawn from the Feb 28 low.