OPTIONS: Large Sonia Trades Notable Thursday
Thursday's Europe rates/bond options flow included:
- DUH6 106.90/107.00/107.20c ladder, bought for 2.5 in ~5.3k
- ERU6 97.625p, bought for 1.25 in 20k
- 0RG6 97.87 calls vs. 97.925 10.5K given at 6.25
- SFIG6 96.40/96.35/96.30p ladder, sold at 2.5 in 5k
- SFIH6 96.40/96.35ps 1x2, sold at half and 0.75 in 15k
- SFIK6 96.65/96.75/96.85c fly, bought for half in 2k
- SIFH7 96.65/96.80/96.90c fly 1x1x1, bought for 15.5 in 10k (ref 96.57)
- 0NM6 96.50/96.60/96.70c fly, bought for 1.25 in 5.5k
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SOFR OPTIONS: Dec'26 SOFR Midcurve Call Spread Buy
- +20,000 0QZ6 97.50/98.00 call spds, from 5.75 to 6.0 ref 96.78
US TSY FUTURES: BLOCK: Mar'26 5Y Sale
- -20,000 FVH6 109-14.5, sell through 109-14.75 post time bid at 1149:03ET, DV01 $880,600.
- The 5Y contract trades 109-14.25 last (+.25)
US DATA: Soft Dallas Fed Rounds Out Mixed Month For Fed Services Surveys
The Dallas Fed's Texas Service Sector Outlook Survey showed relatively steady activity in December versus November, with a general business activity index reading of -3.3 representing a modest decline vs -2.3 prior (-4.6 had been expected). This concludes a mixed month for regional Fed services surveys, with general activity indices picking up in NY, Richmond and Kansas City, but dipping vs November in Philly and Dallas. We get the national ISM Services index report for December on January 7, with early consensus suggesting a small decline (to 52.2 from 52.6 prior) in line with the Fed surveys and a pullback in the flash S&P PMI for the month.
- The Texas report itself was mixed. The revenue index, "a key measure of state service sector conditions" per the report, rose 2.6 points to +0.1 in December and capex rose 4.3 points to 10.1, but the report also noted "labor market measures suggested little change in employment, though hours worked contracted this month. " Indicators of future activity were likewise mixed (company outlook rose 1.4 points with general business activity down 1.0 points).
- The Texas Retail Outlook Survey, which takes into account only retail firms surveyed, showed that "retail sales fell sharply" per the writeup, with the sales index falling over 14 points to -20.6.
- Price pressures were mixed as well: current prices paid ticked down 1.4 points to 26.2, with prices received more notably up 1.4 points to an 8-month high but with both remaining within the year's ranges. This was the only one of the 5 regional Fed Services surveys to show a dip in prices paid pressures from November to December.
