SONIA OPTIONS: SFIZ6 96.75/96.90/97.05 Call Fly Lifted

• In the FI space, Bund futures continue to trade closer to their recent highs and a short-term bull cycle is still in play. The latest rally does undermine the bear theme and attention is on resistance around the 50-day EMA, at 128.29. A clear break of this average would highlight a stronger reversal and signal scope for a continuation higher, towards 128.75 initially, the Dec 3 high. Key support and the bear trigger is unchanged at 126.75, the Dec 22 low.
• Gilt futures traded sharply higher last week. The contract is through resistance at 91.93, the Nov 27 high. This strengthens a short-term bullish condition and paves the way for a climb towards 92.72 next, a 1.618 projection of the Dec 16 - 17 - 22 price swing. On the downside, initial support is seen at 91.84, the Jan 8 low. Support at the 20-day EMA lies at 91.51. A break of the average would signal a possible reversal.

Danish Foreign Minister Lars Lokke Rasmussen has confirmed that the US-Denmark-Greenland meeting in Washington, D.C., on Wednesday, 14 Jan, will now include VP JD Vance. This will be alongside Rasmussen, US Secretary of State Marco Rubio, and Greenlandic Foreign Minister Vivian Motzfeldt. Rasmussen said that Vance's participation meant the issue of Greenland's future is moving closer to direct talks with President Donald Trump. 

• For the Danish and Greenlandic gov'ts, both vehemently opposed to any US takeover, Vance's presence will inevitably raise memories of the Oval Office meeting involving Ukrainian President Volodymyr Zelenskyy in February 2025, when the VP lambasted the Ukrainian leader for alleged ingratitude towards the US.
• The issue of Trump's aim for the US to take control of Greenland has seen competing bills emerge in the US Congress.
  • Late on 12 Jan, Politico reported that a bipartisan group of House members had submitted legislation "to prevent President Donald Trump from taking action to invade a NATO country or territory, like Greenland." This bill is led by Reps. Bill Keating (D-MA), Brendan Boyle (D-PA), and two retiring centrists, Don Bacon (R-NE), and Steny Hoyer (D-MD).
  • Axios then reported on Rep. Jimmy Gomez (D-CA)'s "Greenland Sovereignty Protection Act," which would prohibit funding for any sort of takeover, a military surge into existing US bases in Greenland, or a PR campaign aimed at the local population.
  • Hardline conservative pro-MAGA Rep. Randy Fine (R-FL) put forward the extreme long-shot "Greenland Annexation and Statehood Act", which would give Trump near-unlimited powers in taking control of Greenland, and expedite a process to give Greenland US statehood. 

Last week's record pace of corporate bond issuance ($164.15B) has throttled back this week as the next earnings cycle kicks off: Bank of NY Mellon and JPM announced this morning - JPM shares gaining after 4Q EPS $4.63, EST. $5.01. Bank of America, Wells Fargo and Citigroup on Wednesday, Goldman Sachs, Blackrock and Morgan Stanley on Thursday.

• Date $MM Issuer (Priced *, Launch #)
• 01/13 $950M Rentenbank 7Y SOFR+37
• 01/13 $500M MuniFin WNG 4Y SOFR+31a
• 01/13 $Benchmark Benin 7Y Sukuk, 2038 and/or 2041 TAP
• 01/13 $Benchmark Woori Bank 3Y investor calls
• 01/13 $Benchmark Central American Bank for Economic Integration (CABEI) 3Y investor calls
• $10.4B Priced Monday