US TSYS: Late SOFR/Treasury Option Roundup
Feb-26 20:04
Better call buying resumed after SOFR & Treasury options appeared mixed on lighter volumes Wednesday morning. Underlying futures bounced off early session lows as Pres Trump's cabinet meeting rekindled market concerns over global trade policy. Projected rate cuts through mid-2025 have firmed up from morning levels (*) as follows: Mar'25 at -0.7bp (-0.5bp), May'25 at -6.9bp (-6.4bp), Jun'25 at -21.5bp (-19.6bp), Jul'25 at -29.6bp (-27.6bp).
- SOFR Options:
- +8,000 0QN5/2QN5 96.50/97.00 call spd strip, 24.75-25.0
- +7,000 SFRM5 95.62 puts, 1.0
- Block, +15,000 2QM5 96.75/97.00 call spds vs. 95.50/95.75 put spds, 1.0 net calls over
- Block, 10,000 2QM5 96.50/96.75 call spds vs. 95.50/95.75 put spds, 4.0 net calls over
- +5,000 SFRU5 98.00/99.00 2x3 call spds 2.0 ref 96.045
- +5,000 SFRM5 95.62 puts 1.0 ref 95.865
- +5,000 SFRJ5 95.75/96.00 1x2 call spds, 3.5 ref 95.87
- +3,000 0QH5 96.18/96.31 strangle, 13.5
- -5,000 SFRZ5 95.68/95.93 put spds 9.5 ref 96.18
- +50,000 SFRM5 96.18/96.62 call spds .62 on legs
- 16,000 0QK5 96.62/96.93 call spds ref 96.295
- 5,000 SFRZ5 95.50/95.87 put spds ref 96.175
- 2,500 SFRZ5 96.12/96.37/96.62 put flys
- 6,500 0QH5 95.93/96.06/96.18 put flys ref 96.25 to -.235
- 4,000 2QJ5 96.25/96.50/96.62 broken call flys ref 96.27
- Treasury Options:
- Block, total 105,000 TYK5 113.5 calls, 19 vs. 110-20/0.17%
- +15,000 TYK5 112 calls, 33 ref
- -6,750 USJ 119/122 call spds, 33
- over -7,000 USJ5 119/122 call spds, 33 ref 117-09
- -10,000 wk4 TY 111 calls, 6
- 4,500 TYK5 114.5 calls, 10 ref 110-18
- +30,000 TYJ5 109/109.5 put spds, 9 ref 110-11.5
- over 5,500 TYJ5 110.5 calls, 42 last ref 110-12
- over 12,200 TYK5 110.5 calls ref 110-123,100 TYK5 106/108 put spds vs. TYM5 105/107 put spd spds
- 2,000 FVK5 106.75/107.5/108 broken call flys ref 107-12.75
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US STOCKS: Late Equities Roundup: New Competition for AI Stocks Weighs on Nasdaq
Jan-27 20:01
- New competition for US AI developers weighed heavily on chip stocks Monday as China's DeepSeek AI startup rattled the tech sector and broader markets in general, Consumer Staples and Health Care sector helped major indexes bounce off lows by midday.
- The DJIA continued to gain in the second half, up 222.64 points (0.5%) at 44645.39, S&P E-Minis down 108.5 points (-1.77%) at 6023.5, the tech heavy Nasdaq fell 710.1 points (-3.6%) at 19242.01.
- Semiconductor makers racked up double digit losses in the the first half: Broadcom -18.46%, Nvidia -17.28%, Micron -14.08%, Monolithic Power -10.71%, while KLA Corp, Applied Materials and Teradyne trade 7-8% in the second half.
- Independent energy provider Vistra weighed heavily on the Utility sector as shares of the stock fell over 28% after Bank of America analysts rated the company at neutral.
- On the positive side, Health Care and Consumer Staples shares led gainers: HCA Healthcare +6.01%, AbbVie +4.01%, while PepsiCo gained 4.11%, Coca-Cola +3.38%.
- Earnings Update: Nucor and Western Alliance Bank announce after Monday's close. Tuesday: PACCAR, Sysco Corp, Synchrony Financial, Lockheed Martin Corp, Veradigm, Royal Caribbean, Polaris Inc., Boeing, NextEra Energy, JetBlue Airways, General Motors, Kimberly-Clark Corp, Invesco, Starbucks, Qorvo and Stryker Corp.
COMMODITIES: WTI Slumps, Precious Metals Decline Amid Equity Market Sell-Off
Jan-27 19:56
- WTI has slumped today, as energy markets trade lower in conjunction with the decline in equity markets, following DeepSeek’s Chinese rollout that has undermined US tech stocks.
- WTI Mar 25 is down by 2.1% at $73.1/bbl.
- The trend structure in WTI futures is still bullish despite the recent pullback. The move down appears corrective and is allowing an overbought trend reading to unwind.
- Having pierced the 20-day EMA, next support is at the 50-day EMA, at $72.15.
- A reversal higher would highlight the end of the correction and refocus attention on $79.48, the Apr 12 ‘24 high and a key resistance.
- Meanwhile, Henry Hub is trading down today as indications for warmer weather spark a sell off.
- US Natgas Feb 25 is down by 9.0% at $3.67/mmbtu.
- Elsewhere, spot gold has fallen by 1.2% to $2,738/oz, as precious metals have been caught up in the sell-off in equity markets.
- A bull cycle for gold remains in play, with sights still on $2,790.1, the Oct 31 all-time high. On the downside, the first key support to watch is $2,671.4, the 50-day EMA.
CANADA: Median Analyst Eyes 2.5% Terminal For BoC
Jan-27 19:52
- The below table is a summary of analysts reviewed by MNI ahead of Wednesday's BoC decision, unanimously expecting a 25bp cut to take the overnight rate target to 3.00%.
- BoC-dated OIS rates have pushed lower recently but are still more hawkish than the median analyst, pricing a terminal between 2.6-2.7%.
- Please find the full MNI BoC Preview here.
