US NATGAS: Reuters Survey Expects 232 Bcf Withdrawal for Week Ending Jan 23rd

Better SOFR & Treasury put buying reported on net Monday, fading bid in underlying while projected rate cut pricing gains slightly vs. early morning levels (*): Jan'26 at -4bp, Mar'26 at -14.2bp (-13.9bp), Apr'26 at -21bp (-20.3bp), Jun'26 at -35.8bp (-34.3bp). 

• SOFR Options:
  • +2,500 SFRJ6 96.18/96.31/96.43 put flys, 1 ref 96.705
  • -4,000 SFRH6 96.50/96.56 call spds, 2.5
  • +5,000 SFRH6 96.31/96.37 put spds vs. SFRG6 96.31 puts, 1.25 net
  • +2,000 SFRM6 96.00/96.25 put spds, .25 ref 96.705
  • +3,000 0QF6 97.50 calls, 0.25 ref 96.90
  • +1,000 0QF6/0QH6 96.93 straddle spd, 14.0 net
  • +8,000 SFRF6/G6/H6 96.25 put strip, 1.0
  • 1,000 0QH6 96.93/97.18 call spds vs. 96.75 puts
  • -1,000 0QH6 96.68 puts, 6
• Treasury Options:
  • -8,000 TYG6 112/113.5 strangles, 24.0
  • over +14,000 TYG6 112.5 straddles, 61
  • over +37,000 FVG6 108.75/109.5 put spds, 16 ref 109-14.25/0.26%
  • 5,100 wk3 2Y 105/105.12 1x2 call spds ref 104-13.25
  • 1,150 FVG6 109.5/109.75/110 call trees
  • 2,000 FVG6 109/109.5 put spds, 13 ref 109-14
  • +20,000 FVH6 108.5 puts, 11 ref 109-14.25
  • -3,000 TYG6 112.75 calls, 32 vs. 112-26/0.45%
  • +2,000 Wed wk5 TY 112.25/112.5 2x1 put spds, 2 vs. 112-19/0.04%
  • +2,000 TYG6 113/114.5 call spds, 19 vs. 112-23.5/0.31%
  • -1,000 FVG6 109.5 calls, 17.5
  • -2,000 FVG6 108.5/109 put spds, 6.5-7
  • -3,200 TUG6 104.12 puts, 2

• Stocks remain weaker Monday, an additional round of late session (risk-off) selling after Pres Trump mentions "IRAN IS BUILDING UP AGAIN .. WILL KNOCK IRAN OUT IF THEY ARE BUILDING UP AGAIN" Bbg reported.
• Currently, the DJIA trades down 200.04 points (-0.41%) at 48511.65, S&P E-Mini Futures down 26.25 points (-0.38%) at 6953.25, Nasdaq down 136.2 points (-0.6%) at 23457.14.
• Materials, IT and Discretionary sector shares led declines in late trade, mining stocks unwinding support after Gold fell sharply from Friday's record high of 4533.21 to 4330.00 today: Newmont -5.68%, Albemarle -3.21%, Freeport-McMoRan -2.55% and DuPont de Nemours -1.48%.
• Concerns over AI-related valuations weighed on Tech stocks (again): HP -2.28%, ON Semiconductor -2.24%, Sandisk Corp -2.14%, Palantir Technologies -1.91% and NVIDIA -1.76%
• Meanwhile, luxury travel related shares trade weaker: Norwegian Cruise Line -2.85%, Tesla -2.66%, Wynn Resorts -1.91%, Royal Caribbean Cruises -1.84% and MGM Resorts -1.58%.
• On the positive side, Utilities and Energy sector shares led advances ahead midday: Expand Energy +1.98%, Devon Energy +1.60%, Diamondback Energy +1.41% and Exxon Mobil +1.25%. Meanwhile: PG&E gained +1.55%, Edison International +1.41%, Southern Co +1.00% and Dominion Energy +0.83%.

Fed funds futures show a slightly softer implied rate path through the next year, with the end-2026 FF contract implying a 3.03% rate - about 61bp lower than current effective levels. That's about 3bp more easing through the year compared with Friday's close, 9bp vs the immediate aftermath of the strong Q3 GDP report out on Dec 23, and 15bp vs the Dec 10 peak ahead of the last Fed meeting.

• The next cut still isn't seen until after Chair Powell's term as Fed Chair expires in mid-May however, with roughly 21bp of cuts priced through April's FOMC, and 50bp of easing fully priced through the next 3 meetings (Jun, Jul, Sep).
• Near-term catalysts before holidays thin out trade again for New Year's Eve and New Year's Day are relatively limited: Tuesday we get the Chicago Fed's advance estimate of December unemployment ahead of next week's nonfarm payrolls release for the month, as well as MNI Chicago PMI, and the minutes to the FOMC's December meeting.
• We'll publish a preview of the minutes on Tuesday morning ahead of their release in the afternoon. These releases are not often market movers but we will be watching for confirmation that there is a very high bar in the upcoming releases to a follow-up cut in January (only 4bp easing is priced), as well as for any discussion over whether to shift administered rates (eg IORB) in order to keep a lid on effective policy rates.