US-RUSSIA: Rubio-Need To See Roadmap From Russia On Ending Ukraine Conflict

ERQ5 98.37c, bought for 1 in 6k.

Modest SOFR & Treasury option volumes overnight, focus on Tsy calls and short term midcurves. Underlying futures mildly higher, also on light volumes as markets await Wednesday's key CPI inflation data. Projected rate cut pricing steady to gaining slightly vs. late Monday levels (*) as follows: Jun'25 steady at 0.0bp, Jul'25 steady at -3.6bp, Sep'25 at -17.7bp (-17.4bp), Oct'25 at -30.1bp (-29.6bp), Dec'25 at -46.2bp (-44.9bp).

• Treasury Options:
  • -2,000 wk2 FV 107.75 puts, 7.5
  • +4,000 TYN5 111.25 calls, 9
  • Block, +6,000 wk2 TY 111 calls, 5 ref 110-12 (exp Fri)
  • +3,000 TYQ5 108.5/112 call spds 151 vs. 110-11.5/0.55%
  • 1,250 TUQ5 103.75/104 2x3 call spds vs. 2,500 TUQ5 103.12 puts ref 103-17.62
  • Block, +10,000 USN5 115 calls, 13 ref 112-28
  • +3,500 TYU5 107/108 put spds, 11 vs. 111-09/0.08%
  • +4,500 Wed wkly TY 109.25/109.5/109.75/110 put condors, 3 vs. 110-11.5/0.5%
  • +1,500 TYN5 108.75/112.25 strangles, 6
• SOFR Options:
  • +4,000 SFRN5 95.68/95.75/95.81 2x3x1 put flys, 0.5 ref 95.87
  • +10,000 0QU5 96.37/96.62/96.87 call flys, 4.5 ref 96.665 to -.605/0.05%
  • -3,500 SFRU5 95.75/95.93/96.00 broken put trees, 2.0 ref 95.865

Price components in today’s NFIB small business survey reinforce a view that May CPI – released tomorrow – might not see stronger tariff-driven inflation until the summer months. Whilst actual price changes held steady back close to their 2024 average, the breadth of planned price increases tilted higher again for the highest in just over a year even if it's still markedly lower than the surge in 2021/22. 

• The NFIB small business survey was stronger than expected in May at 98.8 (cons 96.0) after 95.8 in April, at what had been its lowest since Oct 2024.
• Whilst off a high of 105.1 in December ahead of Trump’s inauguration in January, it’s still elevated compared to levels through most of 2022-24 when it averaged closer to 90.
• We touched on the already known job components here, which included a notable cooling in wage growth metrics.
• Back to today’s new price setting information, the net share of firms who actually increased prices compared to three months ago held at 25% in May for a second month. It extends a pullback from a recent high of 32% in Feb (highest since May 2023) having returned almost to the 23.4% averaged in 2024 prior to US tariff announcements. It’s still high by pre-pandemic standards though, having averaged 11.5% through 2017-19.
• However, the share expecting to raise prices over the next three months resumed its increase to 31%, above the 30% in March for its highest since Mar 2024. It averaged 27.7% in 2024 and 22.3% in 2017-19.