SOFR OPTIONS: Large Dec'25 SOFR Put Spread Buy

• Q: You’ve said wait and see and that the economy is doing fine, but impacts are already showing up, at ports and with businesses and consumers feeling it. For main street, what’s the breaking point and what would have to happen to see a rate cut?
  • A: Really don’t see in the data big economic effects. We see souring sentiment but that shock from tariffs hasn’t hit yet. We’re going to be looking at both sentiment and real economic data. Remember there will be two effects with weaker economic activity & higher unemployment vs potentially higher inflation. It’s not at all clear what the appropriate response for monetary policy is. Unemployment hasn’t gone up, job creation is fine and layoffs aren’t increasing in any kind of impressive way.
• Q: Trump now says he doesn’t plan to remove you as Chair.
  • A: I don’t have anything more for you on that.

• MNI: US MAR CONSUMER CREDIT +$10.2B
• US MAR REVOLVING CREDIT +$1.9B
• US MAR NONREVOLVING CREDIT +$8.3B

• RES 4: 165.95 2.0% 10-dma envelope
• RES 3: 165.43 High Nov 8        
• RES 2: 164.90 High Dec 30 ‘24 and a key medium-term resistance   
• RES 1: 164.63 High Mar 18 and the bull trigger 
• PRICE: 162.67 @ 16:36 GMT May 7
• SUP 1: 161.70/60 50-day EMA / Low May 6     
• SUP 2: 160.99 Low Apr 22
• SUP 3: 159.48 Low Apr 9   
• SUP 4: 158.56 61.8% retracement of the Feb 28 - May 2 bull leg   

A bullish theme in EURJPY remains intact despite the pullback from the May 2 high. The recent print above key resistance at 164.19, Mar 18 high, is a positive development for bulls. A clear break of this hurdle would confirm a resumption of the upleg that started Feb 28. This would open 164.90 next, the Dec 30 ‘24 high. First key support to watch is 161.70, the 50-day EMA. It has been pierced, a clear break would undermine the bullish theme.