AMERICAS OIL: Net Bullish Nymex WTI Crude Oil Bets Boosted to 3-Month High

• RES 4: 0.6429 High Dec 12 ‘24
• RES 3: 0.6414 38.2% retracement of the Sep 30 ‘24 - Feb 3 bear leg              
• RES 2: 0.6409 High Feb 21 and a bull trigger 
• RES 1: 0.6331/91 High Mar 26 / High Mar 17 and 18 
• PRICE: 0.6300 @ 17:06 BST Apr 2 
• SUP 1: 0.6219 Low Mar 31
• SUP 2: 0.6187 Low Feb 4
• SUP 3: 0.6171/6088 Low Feb 4 / 3 and a key support
• SUP 4: 0.6045 1.500 proj of the Sep 30 - Nov 6 - 7 price swing

AUDUSD has recovered from Monday’s 0.6219 low. This affirms the view that recent weakness is likely corrective, with prices still clear of Feb 4 support at 0.6187. A move through 0.6187 is required to reinstate a bear threat. On the upside, a stronger recovery would refocus attention on 0.6409, the Feb 21 high and a key resistance. Clearance of this hurdle would strengthen the bull cycle and resume the uptrend that started Feb 3.      

Plenty of activity in Washington today outside of the tariff announcement in an hour. Fox News is reporting that the Senate budget proposal to be unveiled by Sen Lindsey Graham today would allow the debt limit increase to be voted on separately from the main bill if necessary, should the "x-date" be looming before there's agreement on the broader fiscal package (that was looking increasingly likely given that there will be a lot of disagreement among Republicans about the details, especially the spending cuts).

• The proposed $5T debt limit increase is higher than the House-passed budget's $4T - giving Treasury more room to manoever if implemented - but is in line with previous reporting.
• The package would also make the Trump tax cuts permanent (using the "current policy" baseline) without any need to consult the Senate parliamentarian.
• Previously it had been reported that Senate Republicans wanted to hold a vote by Saturday.
• Overall this Republican leadership appears confidence that they have the votes to pass this resolution, which looks to both lower risks of a debt default, while delivering large tax cuts along the more aggressive "current policy" baseline. Though it still needs to go back and forth with the House in the reconciliation process, which should take some time.
• Fox: "The Senate amendment includes raising the debt ceiling in the key budget process by no more than $5 trillion. This has been a request of Trump since before he took office the second time.... Republicans who argued to include the debt ceiling in reconciliation said it would prevent Democrats from having leverage down the road, when a vote to raise it would need 60 votes, forcing them to lobby Democrats for support.... The amendment also stipulates that the provision to raise the debt ceiling can be voted on separate from the rest of the resolution, in the case that the "X Date," when the Treasury is unable to meet its financial obligations without intervention, is set to arrive sooner than Republicans are prepared to vote on the entire reconciliation package."

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