USDCAD TECHS: Retracement Mode

• Treasuries look to finish near late session lows, curves bear steepen slightly, risk sentiment muted amid ongoing Iran war concerns buoying crude oil prices despite IEA members pledging to release 400 million barrels of oil.
• Sentiment improved briefly after Trump reiterated duration of war with Iran will be over soon, with "practically nothing left to target". The piece also notes: ""The war is going great. We are way ahead of the timetable. We have done more damage than we thought possible, even in the original six-week period," Trump told Axios. "Israeli and U.S. officials say they are preparing for at least two more weeks of strikes in Iran."
• Core services meanwhile saw marginal moderation from 2.95% in Jan to 2.92% Y/Y in Feb for a fresh low since Sep 2021. Headline CPI inflation was also marginally below average expectations although more firmly centered around the rounded 2.4% with 2.41% Y/Y (MNI median 2.4, av 2.43) after 2.39% in Jan.  
• Treasury futures helding near lows (TYM6 -16.5 at 111-30) after the $39B 10Y note auction re-open (91282CPZ8) tailed again: drawing 4.217% high yield vs. 4.211% WI; 2.45x bid-to-cover vs. 2.39x prior.
• Currently, the TYM6 trades -16.5 at 111-30 vs. -27.5 low., nearing technical support at 111-26.5 (Low Mar 6 and the bear trigger) followed by 111-21.5 (Low Feb 9).
• Projected rate cut pricing continues to retreat from late Tuesday lvls (*): Mar'26 at flat (-.1bp), Apr'26 at -2.9bp (-3.1bp), Jun'26 at -9.2bp (-10.9bp), Jul'26 at -14.6bp (-17.6bp), Sep'26 at -21.2bp (-26.4bp). Market pricing in first (and only) 25bp rate cut at the October 28 meeting.

• RES 4: 160.00 Psychological round number
• RES 3: 159.45 High Jan 14 and the bull trigger
• RES 2: 159.23 High Jan 23
• RES 1: 158.90 High Mar 9
• PRICE: 158.82 @ 17:05 GMT Mar 11  
• SUP 1: 155.94/154.00 50-day EMA / Low Feb 23
• SUP 2: 152.78 Trendline support drawn from the Apr 22 ‘25 low
• SUP 3: 152.10 Low Jan 27 and a bear trigger
• SUP 4: 151.54 Low Oct 29 ‘25

A bull cycle in USDJPY remains in play and Monday’s fresh cycle high reinforces current conditions. The recent breach of the 50-day EMA highlights a stronger reversal. Note too that resistance at 157.76, the Feb 9 high, has been cleared. The clear breach of this level opens 159.45, the Jan 14 high and a key hurdle for bulls. On the downside, initial firm support lies at 155.94, the 50-day EMA.  

Pick-up in SOFR call structures in the second half after better carry-over put flow reported overnight.  Projected rate cut pricing retreats from late Tuesday lvls (*): Mar'26 at -.1bp, Apr'26 at -2.7bp (-3.1bp), Jun'26 at -9.7bp (-10.9bp), Jul'26 at -16.2bp (-17.6bp), Sep'26 at -23.9bp (-26.4bp).

• SOFR Options:
  • +5,000 2QQ6 96.25/96.43/96.62 put trees, 2.5 ref 96.67
  • +10,000 SFRJ6 96.50/96.62 call spds, 1.75 ref 96.425
  • 20,000 SFRJ6 96.50/96.62/96.75 call flys, 1.25 ref 96.42
  • Block, 2,500 SFRN6 96.56/96.75 4x5 call spds, 13.0 net
  • -30,000 SFRU6 96.75/97.00/97.25 call flys, 2.0
  • 5,000 0QJ6 96.56/96.62 put spds 
  • 2,500 SFRM6 96.25/96.31/96.37 put flys
  • 2,000 SFRM6 96.31/96.37/96.43 put trees
  • +3,000 SFRU6 96.87/97.25 call spds, 4.25
  • 3,000 SFRZ6 96.00/96.31 2x1 put spds 
  • +4,500 SFRM6 96.31 puts, 2.25 ref 96.435
  • +4,000 SFRZ6 96.50 puts, 16.5-17.0 ref 96.665 to -.67
  • 2,000 SFRJ6 96.25/96.31/96.37 put flys, .75
  • 4,000 SFRJ6 96.31 puts
• Treasury Options:
  • 3,500 TUJ6 105 calls, 1 ref 104-02
  • 4,500 TYJ6 112 puts, 30 ref 112-01
  • Block/screen, -19,300 TYM6 110.5 puts, 27-28
  • 50,000 wk3 TY 111.5 puts 12, total volume over 51.5k, expires 03/20
  • Block, 4,000 TYM6 111/112.5/114 call flys 
  • +1,000 TYJ6 112.25 straddles, 100
  • +1,000 TYM6 112 straddles, 200 ref 112-08
  • 5,000 TUJ6 104.12/104.25 call spds ref 104-05.38
  • 1,800 TYJ6 111.5 puts, 11 ref 112-13
  • +3,000 wk2 TY 111.5/112 put spds, 5 ref 112-12/0.15%
  • -2,500 FVJ6 109.5 calls, 11.5
  • -2,200 FVJ6 109.75 calls, 8 ref 109-05.5