US TSYS: Late SOFR/Treasury Option Roundup: Rate Cut Pricing Cools
May-23 18:56
Decent option volumes after underlying futures jumped on Pres Trump's unexpected 25% tariff threat on Apple followed by 50% tariffs on EU this morning. Better Treasury calls on net (Jun options expire today), SOFR options more mixed while underlying have unwound much of the initial move. Projected rate cut pricing retreated vs. morning levels (*) as follows: Jun'25 at -0.05 (-1.3bp), Jul'25 at -6.2bp (-7.5bp), Sep'25 at -17.8bp (-21.2bp), Oct'25 at -30.7bp (-35.5bp), Dec'25 at -47.6bp (-53.5bp).
- SOFR Options:
- Block, 5,000 SFRZ5 96.00 puts, 15.0 vs. 96.24/0.34%
- -4,000 SFRZ5 96.25 straddles, 55.0 ref 96.20
- -2,500 SFRU5 95.93 straddles 31.5-31.0
- over 26,000 0QZ5 96.00 puts, 10.5 ref 96.75
- 2,500 0QN5 96.5/96.75/97.12 call flys ref 96.745
- 2,100 SFRU5 95.43/95.62 2x1 put spds ref 95.94
- +3,000 SFRM6 95.37/95.75/96.12 put flys, 5.0 ref 96.635
- 4,000 SFRM5 95.68/95.75 put spds ref 95.6825
- -5,000 SFRU5/SFRZ5 95.68/95.87 put spd spd 3.75/Dec over
- -2,500 2QM5 96.62/96.68/97.12 call flys, 6.25 ref 96.70
- +7,500 2QN5/2QQ5/2QU5 96.00/96.25/96.50 put fly strip, 12.5 total on 12 leg package
- Block, 15,000 SFRM5 95.75/95.93 put spds, 17.75 ref 95.69
- Block, 6,000 0QM5 97.00/97.18 call spds 2.0 ref 96.685
- +5,000 SFRZ5 95.25/95.62/95.75/95.87 put condor, 3.0
- +2,000 SFRH6 94.62/95.62 put spds, 4.25 ref 96.47
- +5,000 SFRN5 95.56/95.62/95.75 2x3x1 put flys, 1.25 ref 95.935
- +5,000 0QN5 96.50/96.75/97.12 broken call flys, 3.0 ref 96.645/0.05%
- +2,000 2QN5 96.00 puts, 2.5
- Treasury Options
- over 11,000 TUM5 103/103.25/103.38/103.5 broken put condors ref 103-10.38
- 2,500 110.25 straddles, 18 ref 110-13.5
- over 11,200 wk5 TY 109 puts, 3 ref 110-14.5, expire 5/30
- 2,000 FVU5 106.5/107.5 put spds ref 107-31.25
- 7,500 TYM5 110.5 calls, 6 ref 110-11.5
- 2,000 TYM5 110.5 straddles, 29 ref 110-15
- over 9,600 TYM5 110.25 calls, 5 ref 110-06.5
- +10,000 TYM5 111 calls, 2 ref 110-16.5
- over 7,600 TYM5 110 puts, 9 ref 109-31
- +12,000 TYM5 110.5 calls, 1 ref 110-01.5/0.05%
- +3,500 TUM 103.25 puts. 0.5
- 3,000 TYM5 110.25/110.5 call spds 2.0 ref 110-02
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US STOCKS: Late Equities Roundup: Trade Wards Aren't an Easy Win
Apr-23 18:48
- Stocks hold decently positive levels in late Wednesday trade - but well off this morning's knee-jerk rally as Treasury Sec Bessent through cold water on trade hopes, clarifying there is no unilateral offer from Trump to cut China tariffs, and that a full China trade deal could take two-to-three years.
- Currently, the DJIA trades up 426.52 points (1.09%) at 39608.04 (40,376 high), S&P E-Minis up 95 points (1.79%) at 5409.5 (5499.75 high), Nasdaq up 465.6 points (2.9%) at 16762.93 (17029.86 high).
- Consumer Discretionary and Information Technology sectors continued to outperform in late trade, leading gainers included Super Micro Computer +10.89%, Amphenol +10.39%, Palantir Technologies +9.00%, Dell Technologies +7.62%, Monolithic Power Systems +7.06% and Advanced Micro Devices +6.82%. Meanwhile, Tesla rallied 8.41% while Amazon gained 4.93%.
- Conversely, a mix of Consumer Staples, Energy and Real Estate sector shares continued to underperform: Enphase Energy -14.62%, Lennox International I-8.10%, American Tower -4.92%, SBA Communications -4.36%, Teledyne Technologies -3.54%, General Dynamics-3.46% and Bristol-Myers Squibb -2.99%.
- Meanwhile, a heavy earnings docket resumes after the close with the following reporting: Whirlpool Corp, Chipotle Mexican Grill, O'Reilly Automotive, Raymond James Financial, Molina Healthcare Alaska Air, Discover Financial Services, Rollins Inc, Newmont Corp, ServiceNow Inc, FirstEnergy Corp, Lam Research Corp, Texas Instruments Inc, Community Health Systems, IBM, United Rentals, Edwards Lifesciences, Viiking Therapeutics and Las Vegas Sands.
JPY: USDJPY Session Highs As US Doesn't Eye FX Rate Targets
Apr-23 18:43
With Tsy Sec Bessent confirming to reporters that the US wouldn't require specific exchange rate targets for the yen in US-Japan trade talks ("absolutely no currency targets", Bessent is quoted as saying, per multiple wires), USDJPY has moved through the session high of 143.22 and now 1.3% higher on the session. Bessent had made similar comments earlier in the day in an interview with Nikkei and other media.
- The trend condition in USDJPY remains bearish and the bounce from Tuesday’s low (139.89) is considered corrective.
- That said, at the highest level since April 14 (last 141.49), Initial firm resistance identified by our tech analyst to watch is the 20-day EMA, at 144.90, about another 1% move from here.
COMMODITIES: Pullback In Gold Extends Further, WTI Crude Declines
Apr-23 18:37
- Spot gold has fallen by a further 3.0% today to $3,280/oz, taking the pullback from yesterday's $3,500.1 all-time high to over 6%.
- The WSJ's latest article on possible Chinese tariff rollbacks provided the latest source of pressure, coming after market fears had already been calmed somewhat as President Trump softened his stance on Fed Chair Powell.
- The pullback in gold has allowed an overbought condition to unwind, with gold piercing initial support at the April 17 low of $3,284.0. Firm support is seen at the 20-day EMA of $3,193.5. Shallower selloffs will be considered corrective at this stage.
- A dominant uptrend remains intact, however, with moving average studies firmly in a bull-mode setup. Initial resistance is at $3,500.1, the Apr 22 high.
- Meanwhile, crude has fallen in a volatile trading session, with the main bearish driver a Reuters report that some OPEC+ members are pushing for another accelerated supply return in June.
- Earlier signs that the US may ease its tariffs on China were briefly supportive.
- WTI Jun 25 is down by 2.1% at $62.4/bbl.
- Recent weakness in WTI futures has resulted in the breach of a number of important support levels, reinforcing a bearish threat. Initial support is seen at $58.29, the Apr 10 low, followed by $54.67, the Apr 9 low and bear trigger.
- Resistance is seen at $64.49, the Mar 5 low.
