COMMODITIES: Precious Metals Fall Amid Sharp Global Risk-Off Move

• Crude prices have spiked on Tuesday amid mounting geopolitical concerns in the middle east as President Trump said it was a good idea for US citizens evacuate from Iran.
• WTI Feb 26 is currently up by 2.7% at $61.1/bbl.
• Trump told Iranians to keep protesting and that “help is on its way” in a social media post today, the clearest indication yet of possible US intervention.
• Iran has vowed to respond to any US strikes which could sew disruption around production and flow hubs in the Persian Gulf, the site of 20% of global oil supply.
• Despite today’s move, the trend structure in WTI futures remains bearish and recent gains still appear corrective - for now.
• However, note that resistance at the 50-day EMA, at $58.48, has been breached. This signals scope for a stronger corrective phase.
• Key resistance at $61.25, the Oct 24 high, has also been pierced. Clearance of this level would highlight a stronger reversal, opening $64.97, the Sep 26 high.
• Elsewhere, silver also rallied sharply to a fresh record high amid haven demand on Tuesday, with price currently up 2.8% at $87.5/oz.
• The move has seen price pierce $87.355, a Fibonacci projection, a clear break of which would open $90 round number resistance.
• Gold also rose to an all-time high of $4,634.55/oz earlier in the session, before unwinding today’s gains to trade broadly unchanged around $4,595.

SOFR & Treasury options flow remained mixed Monday but tended toward better downside put flow with few exceptions. Note late buying of Jun'26 and Sep'26 SOFR call structures. Underlying futures holding modest gains in late trade - still well off this morning's knee-jerk post-CPI rally. Projected rate cut pricing vs. late Monday levels (*): Jan'26 steady at -1.2bp, Mar'26 at -6.3bp (-6.6bp), Apr'26 at -10.7bp (-11.2bp), Jun'26 at -22.5bp (-23.6bp).

• SOFR Options:
  • +23,000 SFRU6 96.75/96.70/97.25/97.50 call condors 6.0 ref 96.76
  • +7,500 SFRM6 96.43 puts 0.0 over 0QM6 96.37 puts
  • Block, 13,100 SFRU6 96.25/96.50 put spds 4.25 net vs. 96.76/0.18%
  • -10,000 2HQ6 96.25/96.43/96.62 put trees, 5.5 ref 96.655
  • +8,000 3QU6 96.00/96.37 put spds, 14.5
  • +4,000 SFRM6 96.50/96.62/96.75 call flys, 1.75
  • -10,000 SFRM6 96.18/96.37/96.56 put flys, 8.0-7.75 ref 96.59
  • Block/pit, over 17,500 SFRM6 96.31/96.37 put spds, 1.0 net vs. 96.585/0.10%
  • +6,500 0QH6 97.00 calls vs. 2QH6 97.06/97.25 call spds, 1.0 net
  • +5,000 SFRH6 96.56/96.68 call spds, 0.5
  • over 13,500 SFRM6 96.43/96.56/96.62/96.75 call condors ref 96.57
  • Block, 2,500 SFRU6 96.75/97.00/97.75 2x3x1 broken call flys, 8.0 net vs. 96.745
  • 3,000 0QH6 96.68/96.75/96.87/96.93 put condors ref 96.805
  • Block, 5,000 SFRH6 96.37/96.43 call spds, 1.5 ref 96.39
• Treasury Options:
  • +25,000 TYH6/TYK6 110.5 put spds, 20 net vs. 112-08.5/0.14%
  • 6,277 FVG6 108.75/109.25 put spds, 12.5 net ref 109-03.5
  • +20,000 TYK6 114.5 call, 20 vs. 112-05.5/0.16%
  • +50,000 wk1 TY 117 calls, 1
  • +10,000 TUM6 103.75/104.12/14.37 broken put flys, 1.0
  • 5,000 TYH6 111/113 call spds
  • Block, -20,000 TYH6 111 puts, 10 vs. +25,0000 TYK6 114.5 calls, 19
  • paper -11,000 TYH6 111 puts 10 separately
  • +25,000 TYK6 115 calls, 15 ref 112-07, appr vol 4.82%
  • +13,000 wk3 FV 109 straddles, 17-17.5
  • over 23,100 TYG6 111.75 puts, 9 last
  • 3,250 FVG6 108.75/109 put spds ref 108-31 to -31.25
  • over 7,500 TYG6 111.75 puts, 9 last ref 112-02
  • 3,300 TYG6 111 puts ref 112-02.5
  • 1,500 TYG6 111.25/111.5/112 broken put flys ref 112-05.5

• Stocks continue to move off record (SPX eminis, Nasdaq) or near record highs late Tuesday as markets continue to digest the anomalous CPI inflation data stemming from a reversal of November holiday sale discounting for goods products, along with sampling issues from the use of bimonthly metro area surveys, not to mention continued expectation that tariff passthrough would take an upside toll on goods CPI.
• The DJIA currently trades down 374.04 points (-0.75%) at 49215.67 after failing to breach yesterday's record high of 49,633.35, the S&P E-Mini Futures down 25.75 points (-0.36%) at 6,991.75.5 vs. 7,036.25 record high, Nasdaq down 77 points (-0.3%) at 23,658.65 vs. 23,813.30 record.
• Energy, IT and Health Care sector shares primarily led advances in the first half, oil and gas shares buoyed by another geopol-risk driven rally in crude (WTI +1.55 at 61.05): APA Corp +4.94%, Texas Pacific Land Corp +4.48%, Diamondback Energy +3.57%, Devon Energy +3.56% and Halliburton +3.10%.
• Semiconductor makers continued to fair well in the second half: Intel Corp +8.40%, Advanced Micro Devices +6.50%, Arista Networks +5.16%, Corning Inc +2.53% and Amphenol Corp +2.19%.
• Meanwhile pharmaceuticals buoyed the Health Care sector: Moderna +15.46%, Revvity Inc +5.01%, Viatris Inc +3.35% and Cardinal Health +2.96%.
• Conversely, Financial sector shares underperformed: Visa Inc -4.07%, Progressive Corp -3.87%, Mastercard -3.64% and Block Inc -3.62%, while JPMorgan Chase declines -3.97% to 311.60 after hitting 326.78 briefly after reporting earnings that included over a $2B credit card losses.
• Bank earnings resume tomorrow: Bank of America, Wells Fargo and Citigroup on Wednesday, Goldman Sachs, Blackrock and Morgan Stanley on Thursday.