STIR: Midmorning-Post ECB/US DATA SOFR Options Roundup
Option desks reported mixed SOFR options since this morning 25bp ECB rate cut, higher PPI and weekly jobless claims, leaned towards calls on net before underlying futures retreat back to early pre-data/ECB levels. Desks reevaluating tactical trades as projected rate cuts into early 2025 look near steady/mixed vs. early morning levels (*) - but well off yesterday's post-CPI lows: Dec'24 cumulative -24.5bp (-24.7bp), Jan'25 -30.4bp (-29.5bp), Mar'25 steady at -44.1bp, May'25 -51.4bp (-51.6bp).
- +5,000 SFRU5 95.87/96.00/96.12/96.25 put condor 2 ref 96.135
- +10,000 2QG5 96.50/97.00 call spd v 3QG5 96.50/97.00 call spd .5 net
- -6,000 SFRZ5 95.25/95.75 2x1 put spds 1.5 ref 9620
- +5,000 2QG5 95.50/96.00 put spds 6.0 ref 96.285
- -6,000 0QH5 97.25/97.75 call spds vs 2QH5 97.37/97.87 call spds .5net
- +10,000 SFRM5 96.56 calls v 2QM5 97.00 calls 1.25 net
- -5,000 SFRZ4 95.62/95.68 call spds 3.0 vs. 95.655/0.91%
- -5,000 SFRH5 95.62/95.87/96.12 call flys vs 95.87 puts .25 net
- -5,000 SFRZ4 95.62/95.68 call spds 3.0 ref 95.6525
- +5,000 SFRM5 98.00 calls 2.0 vs. 96.085/0.10%
- +4,000 SFRF5 SFRG5 95.56/95.62/95.68 put fly strip .75 total
- +10,000 SFRZ5 98.00/99.00 1x2 call spds 2.0 ref 96.22
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EU: Seeking Powerful Competitiveness Portfolio, Séjourné's Hearing Underway
Prospective European Commission Executive VP for Prosperity and Industrial Strategy, France's Stéphane Séjourné, is speaking at his commissioner-designate hearing. Livestream here. Should he pass through the hearing process unscathed, Séjourné will hold one of the most powerful portfolios in the Commission, overseeing the Union's drive for competitiveness.
- Finbarr Bermingham at SCMP posts some of Séjourné's more market and macro-pertinent comments: On China, Séjourné says: "We have to strike a balance between an offensive approach with trading partners to make sure we have security of supply, for example, but we also need a defensive approach, for example, with the foreign subsidies regulation, or the trade defence instruments"
- Asked about the EU being caught between US & China "I'm not pleased with the imbalances between the US and Europe in terms of trade, and so we will have to be intransigent in our ability to defend, trade wise, our businesses. [...] But we should not start a trade war."
- On Trump: "We can't be pleased by the rhetoric in the US presidential campaign, if we believe what might be done in terms of trade policy, that will have an impact on Europe, we will work in the upcoming weeks to try to convince US that we should not have a trade war"
- Asked about a "Buy European Act": "We'll give 1st preference to European goods in certain strategic sectors. We need to identify those strategic sectors...There are a number of tools we need to develop, tools that are under-used, eg reciprocity clauses in public procurement"
US TSY OPTIONS: Update Dec'24 10Y Put Sale
- Total -30,000 TYZ4 108.5 puts, 6-5 ref 109-25.5
EQUITY TECHS: E-MINI S&P: (Z4) Bulls Remain In The Driver’s Seat
- RES 4: 6145.26 1.236 proj of the Aug 5 - Sep 3 - 6 price swing
- RES 3: 6103.88 1.500 projection of the Sep 6 - 17 - 18 price swing
- RES 2: 6070.16 1.382 projection of the Sep 6 - 17 - 18 price swing
- RES 1: 6053.25 High Nov 11
- PRICE: 6031.50 @ 14:47 GMT Nov 12
- SUP 1: 5927.25 High Oct 17 and a recent breakout level
- SUP 2: 5863.50/5724.25 20-day EMA / Low Nov 4
- SUP 3: 5675.25 Low Sep 18
- SUP 4: 5658.00 Low Sep 13
Bullish conditions in S&P E-Minis remain intact and the contract is holding on to its recent gains. A key short-term support has been defined at 5724.25, the Nov 4 low. The latest rally resulted in a breach of the bull trigger at 5927.25, Oct 17 high, confirming a resumption of the primary uptrend. The 6000.0 psychological handle has been pierced. Sights are on 6070.16, a Fibonacci projection. Initial support is at 5927.25, the Oct 17 high.
