MACRO OUTLOOK: MNI US Macro Weekly: Between A Soft And A Hard Place

Uncertainty over this afternoon's reciprocal tariff announcement spurred heavy SOFR option volumes Wednesday, mixed flow wing outpacing Treasury options as underlying futures retreated from morning highs. Projected rate cuts through mid-2025 have receded vs. morning levels (*) as follows: May'25 at -3.4bp (-4.7bp), Jun'25 at -17.9bp (-21.2bp), Jul'25 at -33.1bp (-37.1bp), Sep'25 -49.6bp (-53.9bp).

• SOFR Options:
  • +15,000 0QK5 96.12/96.25/96.37 put flys, 1.75 ref 96.54
  • +5,000 0QKJ5 96.12/96.25/96.37 put flys, 1.25 ref 96.56
  • Block, 6,000 SFRM5 96.12/96.50 call spds, 3.5 ref 95.915, adds to earlier Block at 3.75
  • +10,000 2QK5 96.00/96.25/96.50 1x3x2 put flys, 2.0 ref 96.62
  • +6,000 SFRZ5/0QZ5 97.00/98.00 call spd spd, 8.0 net conditional flattener
  • 5,000 SFRZ5 95.12/95.62 put spds ref 96.415
  • 10,000 SFRK5 96.37/96.87 call spds vs 2,500 95.87 puts, 0.0 net vs. 95.925/0.78%
  • -4,000 SFRU5 96.75/97.25 call spds, 4.5 ref 96.22
  • Block/screen, 33,000 SFRU5 95.25/95.75 put spds, 2.5 ref 96.22
  • Block/screen, 29,000 0QM5 96.81/97.00 call spds, 5.0 ref 96.615
  • 26,000 0QU5 95.50 puts ref 96.635
  • 3,500 0QM5 97.50 calls ref 96.62
  • 2,000 SFRK5 95.62/95.75/95.81/95.87 broken put condors ref 95.93
  • 8,000 SFRM5 95.62/95.68/95.87/95.93 put condors ref 95.92
  • 13,700 SFRM5 95.68/95.75/95.81/95.87 put condors ref 95.92
  • 1,500 SFRM5 96.00/96.25/96.37 broken call flys ref 95.92
  • 2,000 SFRN5 96.12/96.25/96.37 call flys ref 96.205
  • 2,100 2QM5 96.56/96.81 call spds vs. 95.68/95.81 put spds ref 96.555
  • 6,000 0QM5 96.75/97.00 call spds ref 96.595 to -.59
  • +8,000 SFRM5 95.62/95.68/95.87/95.93 put condors, 3.5 vs. 95.895/0.05%
  • Block/screen +13,000 SFRM5 96.12/96.50 call spds 3.75 ref 95.92
• Treasury Options:
  • 2,000 FVM5 107/109.5 strangles, 41.5 ref 108-06.25
  • -3,750 TYN5 111.5 straddles, 240-238 ref 111-26.5
  • -15,000 TYK5 111 puts, 25 ref 111-26
  • 12,900 wk2 TY 111.25/112 put spds, 22 ref 111-31.5 (exp Apr 11)
  • 3,000 TYM5 109.5/110.5 put spds, 15 ref 111-30 to -30.5
  • +10,000 FVK5 107.5 puts, 8.5 ref 108-17.5, total volume over 12.5k
  • 1,600 TYM5 112/113 call spds ref 111-26.5
  • 1,100 FVK5 108.5/109/109.25/109.5 broken call condors
  • over 6,000 TYK5 111.5 calls, 55 ref 111-22.5
  • 1,350 TYM5 112/114 call spds vs. 110 puts ref 111-21.5
  • -10,000 TYK5 113.25 calls, 17 ref 111-25
  • over 3,300 TYK5 114.5 calls ref 111-21.5
  • -5,000 Wed wkly 10Y 111.75/112 put spds, 13 ref 111-16.5

• RES 4: 165.43 High Nov 8        
• RES 3: 164.90 High Dec 30 ‘24 and a key medium-term resistance   
• RES 2: 164.55 High Jan 7
• RES 1: 164.19 High Mar 18 and the bull trigger 
• PRICE: 162.95 @ 17:05 GMT Apr 2 
• SUP 1: 160.78 Low Apr 1 pivot support and the 50-day EMA 
• SUP 2: 160.06 Low Mar 13   
• SUP 3: 158.90 Low Mar 10  
• SUP 4: 158.00 Round number support 

The trend structure in EURJPY remains bullish and recent weakness appears corrective. The pullback has allowed an overbought condition to unwind. Pivot support is 160.75, the 50-day EMA. A break of it would signal potential for a deeper retracement. For bulls, attention is on 164.08, the Jan 24 high. It has been pierced, a clear break of this hurdle would strengthen a bullish condition and open 164.90, the Dec 30 ‘24 high.    

• Stocks are holding modestly higher levels in late trade, near mid-range for the session as markets await Pres Trump's reciprocal tariff announcement scheduled for 1600ET.
• Though several news outlets announced over the last couple days that Elon Musk would be stepping down from DOGE by the end of May, stocks extended gains through midday after Politico reported that Musk will step back from "governing partner" role in the next few weeks.
• Currently, the DJIA trades up 125.99 points (0.3%) at 42114.26, S&P E-Minis up 20.25 points (0.36%) at 5695.75, Nasdaq up 89.3 points (0.5%) at 17539.26.
• Consumer Discretionary and Financial sectors outperformed in the second half, Caesars Entertainment +4.91%, , Tesla +4.40%, CarMax +4.17% and DoorDash +3.62% buoyed the Consumer Discretionary sector.
• Banks and services supported the Financial's sector with Discover Financial Services +3.28%, Invesco +2.86%, Synchrony Financial +2.80%, Blackstone +2.61% and Capital One Financial +2.23%.
• Consumer Staples and Communication Services sectors underperformed in late trade with Altria Group -4.29%, Mondelez International -2.65%, Hershey -2.54% and Philip Morris International -1.75% weighing on the former.
• Meanwhile, telecom stocks weighed on the Communication Services sector: T-Mobile -1.89%, Verizon Communications -1.59%, AT&T -1.18% and Comcast Corp -1.08%.