OPTIONS: Large Flow Continues To Go Both Ways In Volatile Week

• Stocks are trading firmer Monday, at or near midday highs after opening weaker - with Consumer Discretionary and IT sector shares outperforming.
• Currently, the DJIA trades up 476.22 points (0.97%) at 49368.27, S&P E-Mini Futures up 43 points (0.62%) at 7009, Nasdaq up 175.2 points (0.7%) at 23637.7.
• Leading advances in the first half include multiple hardware and semiconductor makers that rebound from last week's selling: Sandisk Corp +16.23%, Western Digital +7.62%, Corning +6.73%, Seagate Technology +6.04%, Intel +5.60%, Micron Technology +5.54% and Advanced Micro Devices +4.99%.
• Consumer Discretionary shares included luxury travel stocks: Carnival +7.10%, United Airlines +5.67% and Norwegian Cruise Line +5.24%.
• On the flipside, Energy & Utility shares led declines in the first half with crude prices fell sharply (WTI -33.43 at 61.78) as middle east tensions cooled with Pres Trump's tone on Iran softening (while the carrier battle grop remains in the region): EQT -4.92%, Expand Energy -3.99%, ONEOK -3.64%, Occidental Petroleum -2.78%, Diamondback Energy -2.65% and Coterra Energy -2.53%.

• Despite some sharp moves lower for both precious metals and equities in early trade Monday, a subsequent recovery for risk has helped boost the US dollar, where sentiment has also been supported by a stellar set of US ISM manufacturing PMI data.
• The ISM manufacturing report was far stronger than expected in January as it jumped 4.7pts to 52.6 for its highest since Aug 2022, significantly above even the highest analyst estimate of 51.0. This has assisted the dollar index to extend intraday gains to around 0.5%, extending its recovery from last week’s cycle lows to over 2%.
• This has in turn weighed on EURUSD, which has today slipped back below 1.18, an impressive reversal from last week’s 1.2081 peak. Moves have met the primary objective for a pullback, that being 1.1793, the 20- day EMA. However, more meaningful support is at the 50-day EMA, which lies at 1.1729, important as we approach this week’s ECB decision and press conference.
• It’s the Swiss franc which has notably underperformed on Monday, with USDCHF (+0.95%) retaking the 0.78 handle and EURCHF rising back above 0.92. Given the de-risking that has been on display elsewhere since Friday, short-term positioning dynamics may be assisting the squeeze higher for cross/CHF, while some analysts have pointed to the depressed EURCHF levels as potentially ringing the alarm bells for the SNB.
• In emerging markets, US President Donald Trump said in a statement on Truth Social that he has agreed to lower the reciprocal tariff rate on India from 25% to 18% after agreeing a trade deal with Indian Prime Minister Narendra Modi. The announcement prompted USDINR 1-month NDFs to slip further on the session, currently down around 1.2%.
• News has crossed indicating both tomorrow’s US JOLTS data and Friday’s payrolls report will be rescheduled owing to the US Government shutdown. The calendar will be highlighted by the RBA decision, where a 25bp hike is expected by a majority of surveyed analysts.

*US-IRAN TALKS TO TAKE PLACE IN ISTANBUL ON FRIDAY: AXIOS

• *AXIOS SAYS US OFFICIAL CONFIRMED US-IRAN TALKS FRIDAY
• *KUSHNER TO ALSO JOIN MEETING ON US-IRAN TALKS: AXIOS