US: MNI POLITICAL RISK - Few Super Tuesday Surprises Expected
- Voters in 15 states, and one territory, will vote today in contests to decide their party’s nominee for the presidency. Former President Donald Trump is expected to win most, if not all states, against former South Carolina Governor Nikki Haley.
- On the Democrat side, President Biden, running largely unchallenged by a credible opponent, will continue to rack up delegates towards his nomination. In the wake of the large ‘uncommited’ vote in Michigan last week, the scale of protest votes and overall turnout may provide some more data on the health of his campaign.
- Israeli War Cabinet member Benny Gantz will continue his ‘unsanctioned’ trip to Washington D.C. today, meeting with Secretary of State Antony Blinken, Senate Majority Leader Chuck Schumer (D-NY), and House Minority Leader Hakeem Jeffries (D-NY).
- High-profile Democrat Reps, Katie Porter (D-CA) and Adam Schiff (D-CA,) are contesting a primary today for the 2024 California Senate race.
- President Biden is reportedly preparing to pivot to a more “aggressive” and "personal" approach to taking on former President Donald Trump.
- Biden’s Competition Council will today announce three new actions to, “promote competition and lower costs,” and release a new report showing that, “work to eliminate junk fees will save Americans more than $20 billion each year.”
- The United States Supreme Court ruled unanimously yesterday that states cannot unilaterally bar former President Donald Trump from the 2024 presidential ballot, clearing another potential obstacle for Trump’s re-election bid.
- Poll of the Day: Biden isn't benefiting from an improved economic outlook.
Full article: US Daily Brief
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US TSYS: January Jobs Surge Weighs on Projected Rate Cut pricing
Tsy futures gapped lower after broadly higher than expected Change in Nonfarm Payrolls of +353k vs 185k est (prior up-revised to 333k from 216k), Private Payrolls surge to +317k vs. 170k est. Unemployment Rate 3.7% vs. 3.8% est while Labor Force Participation Rate near steady at 62.5% vs. 62.6% est.
- Futures continued to extend lows after little initial react to UofM and Factory/Durables Order data
- U. of Mich. Sentiment (79.0 vs 78.9 est)
- U. of Mich. Current Conditions (81.9 vs. 83.5 est)
- U. of Mich. Expectations (77.1 vs. 76.0 est)
- U. of Mich. 1 Yr Inflation (2.9% vs. 2.9% est), 5-10 Yr (2.9% vs. 2.8% est)
- Mar'24 10Y futures currently trading -1-06.5 at 111-22. Technical support at 111-16/110-26 Low Feb 2 / Low Jan 19 and bear trigger. Curves remain flatter but well off lows: 2s10s -2.206 at -34.839 (-40.198 low), while 10Y yield remained above 4% at 4.0237% (+.1435) after starting the day around 3.8648%.
- Factory Orders in-line w/ 0.2% vs. est, Ex Trans (0.4% vs. 0.2% vs. est)
- Durable Goods Orders in line w/ 0.0% vs. est, ex Trans (0.5% vs. 0.6% vs. est)
- SOFR futures gapped lower (SFRH4-SFRZ4 -0.080-0.210) while projected rate cut chances retreated: March 2024 chance of 25bp rate cut currently -22.2% vs. -38.7% pre-data w/ cumulative of -5.6bp at 5.263%, May 2024 at -70.6% vs. -90.8% w/ cumulative -23.2bp at 5.087%, while June 2024 at retreated to -87.9% vs. 105% w/ cumulative -45.2bp at 4.867%. Fed terminal at 5.3175% in Feb'24.
US TSYS: Late SOFR/Treasury Option Roundup: Adjusting to Drop in Rate Cut Odds
SOFR and Treasury option remained mixed on heavy volume Friday, accounts adjusting positions after an unexpected surge in January jobs: +353k vs 185k est (prior up-revised to 333k from 216k), Private Payrolls surge to +317k vs. 170k est. SOFR futures gapped lower (SFRH4-SFRZ4 -0.080-0.210) while projected rate cut chances retreated: March 2024 chance of 25bp rate cut currently -22.2% vs. -38.7% pre-data w/ cumulative of -5.6bp at 5.263%, May 2024 at -70.6% vs. -90.8% w/ cumulative -23.2bp at 5.087%, while June 2024 at retreated to -87.9% vs. 105% w/ cumulative -45.2bp at 4.867%. Fed terminal at 5.3175% in Feb'24. Salient trade includes:
- SOFR Options:
- Block, 20,000 SFRU4 95.31/95.43 call spds, 6.5 ref 95.59
- Block, 10,000 SFRU4 94.93/95.37/95.43/95.68 broken put condors, 1.0 net - belly over
- Block, 10,000 SFRM4 95.31/95.43/95.56/95.68 call condors, 1.25
- Block, 5,000 SFRH4 95.50 calls, 1.25 ref 94.795/0.09%
- Block, 5,000 SFRM4 95.37/96.00 call spds, 8.0 ref 95.20
- Block, 5,000 SFRH4 95.00/95.06/95.12 call flys, 0.25 ref 94.795
- +9,000 SFRH4 95.00 calls, 2.5 ref 94.81/0.10%
- Block, 20,000 SFRH4 94.87/95.00/95.12/95.25 call condors, 0.75
- Treasury Options:
- +10,000 FVH4 106 puts, 2.5
- 10,000 TYH4 111.5 puts, 43.0, total volume on nay over 98k
- Block, 10,500 TYM4 111 puts, 105 vs. 111-19/0.16%
- 8,400 TYH4 112.5/113.5 1x2 call spds, 2 ref 111-20.5
- -2,900 TYM4 112 straddles, 318 ref 112-08.5
- 6,000 FVH4/wk2 FV 108.5 straddle spds
- 1,800 FVH4 106.75/107.5/108.25 2x3x1 put flys ref 107-31.5
- 2,300 TYH4 109.5/110.5/111.5 put flys, 10 ref 111-27.5
STIR: BLOCK, Sep'24 SOFR Call Spread
- 20,000 SFRU4 95.31/95.43 call spds, 6.5 ref 95.59 at 1458:32ET
