US TSYS: Risk-Off Gains Traction as Iran Retaliates Against Israeli Strikes

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

• 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%.

• 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.