US TSYS: Risk-Off Gains Traction as Iran Retaliates Against Israeli Strikes
Jun-13 19:16
- Treasuries look to finish broadly lower Friday, off late session lows amid some position squaring amid reports Iran has retaliated against Israel's heavy bombing the night before with dozens of their own missile Friday.
- Israel struck over 200 targets in Iran including nuclear facilities overnight, killing several military commanders. Iran has 7 known nuclear facilities: Arak, Bushehr, Darkhovin, Fordow, Karun, Natanz and Isfahan -- of which the last 2 were hit. Israeli officials said the operation would last several days.
- Treasuries came under pressure after latest UofM sentiment came out higher than expected, 1Y inflation much lower than expected (5-10Y in-line). Details implied a notably heavier response from republican-leaning respondents, who have much lower inflation expectations under the Trump administration.
- According to data pulled in by Bloomberg, whilst the median 1Y expectations slipped from 6.6% to 5.1%, democrats increased from 9.4% to 10.1%, independents from 7.2% to 7.5% and republicans from 1.0% to 1.5%.
- After the bell, Tsy Sep'25 10Y futures currently trade -14 at 110-20 vs. 110-14 low, technical support below at 109-28 (Low Jun 6 / 11). Curves steeper: 2s10s +1.512 at 46.245, 5s30s +1.914 at 89.213.
- Cross asset: Stocks remain weaker (SPX eminis -68.75 at 5980.75), Gold higher at 3437.00, Bbg US$ index +2.95 at 1202.97.
- Aside from geopolitical risks, markets await the next FOMC policy announcement next week Wednesday.
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US TSYS: Late SOFR/Treasury Option Roundup: Lower Rate Cut Hedging
May-14 19:12
SOFR & Treasury options look two-way/paired as underlying futures continued to gradually extend lows after the bell. Projected rate cut pricing steady in the near term while longer dates retreat vs. this morning levels (*) as follows: Jun'25 steady at -2.1bp, Jul'25 steady at -9.8bp, Sep'25 at -22.8bp (-24.7bp), Oct'25 at -34.8bp (-37.3bp), Dec'25 at -49.6bp (-52.9bp).
- SOFR Options:
- +5,000 SFRU5 96.62/97.12 call spds, 1.62 ref 95.905
- +5,000 SFRQ5 95.62/95.75/95.81/95.87 put condors, 0.75 ref 95.905
- +30,000 SFRZ5 95.62/96.00 put spds vs. 0QZ5 95.87/96.25 put spds, 1.75-2.0 db bear curve flattener
- +20,000 SFRU5 97.50 calls, 1.5
- -4,000 2QM5 96.12/96.37 put spds, 5.5 ref 96.495
- Block, 10,000 SFRM6 96.37/98.25 call spds, 42.0 vs. 96.505/0.42%
- 5,000 SFRU5/SFRZ5 95.68/95.81 put spd spd, 2.0 Sep over
- +5,000 SFRN5 95.50/95.62/95.68/95.81 put condors, 3.0 ref 95.93
- -4,000 SFRZ5 95.75/96.00 put spds, 9
- 3,000 SFRV5 95.62/95.81/95.87 put trees ref 96.205
- Block, 2,500 SFRM5 95.75/95.81/95.93/96.00 put condors, 0.25 ref 95.705
- -4,000 SFRU5 96.25/96.75 call spds, 4.5 ref 95.94
- 4,000 OQK5 96.62/96.87 2x1 put spds ref 96.53
- Treasury Options:
- 4,500 TUN5 103.75/104 2x3 call spds, 1.5 net ref 103-15.5
- 3,000 TYN5 108/108.5 put spds 5 ref 110-02.5
- +5,000 TYU5 133 calls, 33 ref 110-00 to -00.5
- +1,000 TYM5 110.25/110.75/111.25 2x3x1 call flys, 16
- -2,000 TYM5 110.25 straddles, 53
- -7,500 TYM5 109.5 puts, 11
- 4,200 FVM5 108.75 calls, 2 last
- 3,200 FVM5 107.5 puts, 18 last
- -1,250 FVM5 107.5/107.75/108.25 broken put flys, 15 vs. 107-19.5/0.05%
- +1,000 FVM5 108.25/108.75 call spds, 3.5
US STOCKS: Late Equities Roundup: Tech Heavy Nasdaq Outperforms
May-14 19:03
- Stocks remain near steady (SPX eminis) to mixed in late Wednesday trade, tech-heavy Nasdaq outperforming as semiconductor makers led gainers for the second consecutive session.
- Stocks have bounced off recent Wednesday session lows after Pres Trump "signed an agreement with Qatar to generate an economic exchange worth at least $1.2 trillion," according to a fact sheet issued by the White House.
- Currently, the DJIA trades down 68.36 points (-0.16%) at 42070.86, S&P E-Minis up 4.25 points (0.07%) at 5908.75, the Nasdaq up 103.6 points (0.5%) at 19113.34.
- Information Technology and Communication Services sectors continued to outperform in late trade, leading gainers included: Super Micro Computer +17.51%, Advanced Micro Devices +4.31%, NVIDIA +3.92%, Enphase Energy +5.71% and Dell Technologies +2.72%.
- Interactive media and entertainment shares continued to support the Communication Services sector: Alphabet +3.4%, Take-Two Interactive Software +1.51%, Match Group +2.05% and Meta +0.66%.
- On the flipside, Health Care and Utilities continued to underperform, pharmaceuticals weighing on the former: Bio-Techne -6.38%, Revvity -5.09%, Moderna -4.96% and AbbVie -4.76%.
- Shares weighing on the Utility sector included: Eversource Energy -2.45%, Exelon -1.73%, WEC Energy Group -1.37%, Consolidated Edison -1.38% and Constellation Energy -1.62%.
EURJPY TECHS: Rally Fails to Hold
May-14 19:00
- RES 4: 167.40 61.8% retracement of the Jul 11 - Aug ‘24 sell-off
- RES 3: 166.69 High Oct 31 2024 and a key resistance
- RES 2: 166.10/67 High Nov 6 / 2.0% 10-dma envelope
- RES 1: 165.43 High Nov 8 2024
- PRICE: 164.06 @ 15:57 GMT May 14
- SUP 1: 163.00 20-day EMA
- SUP 2: 162.10/161.60 50-day EMA / Low May 6
- SUP 3: 160.99 Low Apr 22
- SUP 4: 159.48 Low Apr 9
Having strengthened on Tuesday, EURJPY reversed into the Wednesday close, but is holding on to the bulk of its recent gains. The latest climb paves the way for a move towards 165.43, the Nov 8 ‘24 high. Moving average studies are in a bull mode position, highlighting a dominant uptrend. Support to watch is 162.10, the 50-day EMA. A break of this level is required to signal a possible reversal.
