EM LATAM CREDIT: Raizen: No News is Bad News – Neutral

SOFR & Treasury option volumes remained very limited ahead of the Christmas holiday. Accounts remained sidelined after this morning's strong economic data data while underlying futures retreated in the short end, Tsy curves flatter with 2s-10s weaker vs. Bonds. In that light, projected rate cut pricing cools vs. early morning levels (*): Jan'26 at -3.3bp (-4.4bp), Mar'26 at -11.3bp (-14.8bp), Apr'26 at -17.3bp (-21.9bp), Jun'26 at -30bp (-34.8bp).

• SOFR Options:
  • 3,000 SFRZ6 96.25/96.50 2x1 put spds
  • 8,000 SFRU6 99.00/100.00 call spds, 1.25
  • 3,000 0QF6 97.25 calls ref 96.885
  • 3,000 SFRU6 97.00/97.25 call spds ref 96.8945
  • 4,200 SFRM6 96.62/97.00 strangles, 18.5 ref 96.695
  • 4,600 SFRG6 96.50 calls, 6.0 last
  • -2,000 SFRH6 96.18/96.37/96.43/96.68 put condors, 15.25 ref 96.495
• Treasury Options:
  • 5,000 FVG6 109.75 calls
  • 2,000 TYF6 112.5/112.75 call spds, 2
  • 2,900 FVH6 108.5/110 strangles, 28 ref 109-07
  • +1,000 TYH6 112.5 calls, 49 vs. 112-14.5/0.45%
  • +1,700 TYH6 113.5 calls, 27 ref 112-16.5/0.30%
  • over -4,700 TYG6 110.5 puts, 3 last
  • 2,100 USG6 113 puts, 19 last

• RES 4: 186.41 2.618 proj of the Jul 31 - Sep 29 - Oct 2 price swing
• RES 3: 185.77 2.5000 proj of the Jul 31 - Sep 29 - Oct 2 price swing
• RES 2: 185.16 Bull channel top drawn from the Feb 28 low
• RES 1: 184.92 High Dec 22
• PRICE: 183.88 @ 15:44 GMT Dec 23
• SUP 1: 182.07 20-day EMA
• SUP 2: 179.85 50-day EMA 
• SUP 3: 178.48 Low Nov 12
• SUP 4: 177.02 Bull channel support drawn from the Feb 28 low

The trend structure in EURJPY is bullish and last Friday’s impulsive rally strengthens current conditions. The move higher confirms a resumption of the primary uptrend. Sights are on 185.16, the top of a bull channel drawn from the Feb 28 low. This level also represents a key resistance point. On the downside, support to watch lies at 182.07, the 20-day EMA. A breach of it would signal the start of a corrective cycle.   

• Precious metals have rallied to fresh record highs on Tuesday amid escalating geopolitical tensions, as the US has continued to ramp up pressure on Venezuela with a further military build-up and oil tanker seizures in the Caribbean.
• Spot gold has risen by 1.1% to $4,492/oz, while silver is up by 3.4% at $71.4/oz.
• The move leaves gold up by more than 10% over the past month, while silver has rallied by over 40% through the same period.
• Unsurprisingly, the trend structure in gold remains bullish, with the latest break higher confirming a resumption of the primary uptrend. Next resistance is seen at the $4,500 handle, ahead of $4,536.0, a Fibonacci projection.
• For silver, the latest fresh cycle high reinforces bullish conditions and maintains the current impulsive nature of the rally. Having cleared the $70.0 handle, next resistance is seen at $73.061, a Fibonacci projection, followed by $75.0 round number resistance.
• Meanwhile, the tensions between the US and Venezuela have also boosted oil markets at a time when the focus is on excess supply.
• WTI Feb 26 is up by 0.7% at $58.4/bbl.
• Despite the move, the trend condition in WTI futures remains bearish and short-term gains are considered corrective.
• A key support and the bear trigger at $56.11, the Oct 17 low, has been breached, opening $53.77, a Fibonacci projection.
• On the upside, first resistance is at $58.70, the 50- day EMA, followed by key short-term resistance at $61.25, the Oct 24 high.