USDJPY TECHS: Monitoring Support
- RES 4: 151.21 High Mar 28 and a key resistance
- RES 3: 150.49 High Apr 2
- RES 2: 149.28 High Apr 3
- RES 1: 148.54/65 76.4% of Mar 28 - Apr 22 bear leg / High May 12
- PRICE: 145.61 @ 20:23 BST May 15
- SUP 1: 145.10 20-day EMA
- SUP 2: 142.36 Low May 6
- SUP 3: 141.97 Low Apr 29
- SUP 4: 139.89 Low Apr 22 and a bear trigger
USDJPY remains below Monday’s high and the pair traded lower on Thursday. The latest pullback underpins the view that gains since Apr 22 appear corrective. A stronger reversal lower would refocus attention on 142.36, the May 6 low. First support to watch is 145.10, the 20-day EMA. On the upside, key short-term resistance has been defined at 148.65, the May 12 high. A break of this level would confirm a resumption of the recent bull cycle.
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BOC: Canadian Bank Analysts Split On April Cut, Eye 2.00-2.25% Terminal (1/2)
Analysts’ expectations of the terminal overnight rate range from 1.50-2.75%, with a median of 2.00%.
- Looking first at major Canadian banks - see table below - there is an even 3-3 split on whether the BoC cuts or holds Wednesday.
- Consensus is largely focused on a 2.00-2.25% terminal rate.
BOC: MNI BoC Preview-April 2025: Holding On For More Certainty
Our preview of the April Bank of Canada decision has been published - Download Full Report Here
- In what is seen as a very close call, the Bank of Canada is expected to maintain the overnight rate target steady at 2.75% on Wednesday.
- A pause would come after 225bp of cuts to the middle of the BoC’s currently estimated neutral range of 2.25-3.25%, leaving policymakers in a position to see further developments in the US-Canada trade dispute and the relevant data impact before pulling the trigger on further moves.
- A steady approach would befit BOC Governor Macklem’s comments in March that reiterated the importance of maintaining price stability, with monetary policy becoming less forward-looking and more nimble as officials attempt to navigate the uncertainty of the ongoing trade dispute with the US.
- The latest Monetary Policy Report could show upped expectations of inflation with lower growth forecasts vs the last edition in January, with the overall communications maintaining a tone of uncertainty.
- Reflecting the uncertainty, analysts’ expectations of the terminal overnight rate range from 1.50-2.75%.
US TSYS: Late SOFR/Treasury Option Roundup
Two-way SOFR & Treasury call spd interest and put structure selling since the open. Lowest volumes since prior to the Liberation day tariff announcement. Underlying futures firmer off second half highs, short end lagging; projected rate hike pricing mixed vs. this morning's levels (*) as follows: May'25 at -4.4bp (-5bp), Jun'25 at -20.7bp (-20.2bp), Jul'25 at -38.4bp (-38.4bp), Sep'25 -56.9bp (-56.7bp).
- SOFR Options:
- -5,000 0QU5 96.62 puts, 29.0 vs 96.74/0.42%
- -5,000 3QU5 95.00 puts, 4.0 vs. 96.31/.06%
- +5,000 0QM5 95.25/3QM 95.12 put spds, 1.5 net/3QM over
- -10,000 SFRN5 96.25 calls, 24-23.5 ref 96.27
- +40,000 SFRZ5 98.00/99.00 call spds 5.0 vs. 96.52 to -.50/0.05%
- 4,000 SFRH5 95.62/0QU5 96.37 put spds
- 4,300 SFRM5 96.62 calls, 3.75 bid ref 95.91
- 14,000 SFRU5 95.50/95.75 put spds ref 96.25 to -.255
- 2,000 SFRM5 95.62/95.68/95.75 put flys ref 95.92
- 2,800 0QU5 95.75/96.00 put spds
- Treasury Options:
- 2,500 TYM5 110 puts, 46 ref 110-28.5
- 5,000 TYM5 107/108 put spds ref 110-26.5
- 2,500 TYK5 110.75/111.75 call spds ref 110-23.5
- 3,500 TYM5 110 puts, 50 ref 110-22
- 11,500 FVM5 107.5/108.75 strangles, 101.5
- 2,000 USK5 107/107.5 call spds ref 114-05
- over 12,700 TYK5 111.75 calls, 15 last
- -5,400 TYK5 111.75 calls, 15 ref 110-24
- +4,500 TYK5 108/109/110 put flys, 9 ref 110-21.5
- -3,000 TYK5 111 puts, 48 vs 110-21.5/0.58%
- +20,000 FVM5 110/111.5 call spds, 8.5 ref 108-01 to 107-31.5
- +5,000 FVM5 108.5/109.5/110 broken call flys, 12 ref 108-02
