USDCAD TECHS: Shows Through Near-Term Support

• RES 4: 0.6471 High Dec 9 ‘24 
• RES 3: 0.6429 High Dec 12 ‘24               
• RES 2: 0.6414 38.2% retracement of the Sep 30 ‘24 - Feb 3 bear leg 
• RES 1: 0.6409 High Feb 21
• PRICE: 0.6357 @ 16:15 GMT Feb 24
• SUP 1: 0.6314/6231 50-day EMA / Low Feb 10 
• SUP 3: 0.6171/6088 Low Feb 4 / 3
• SUP 3: 0.6045 1.500 proj of the Sep 30 - Nov 6 - 7 price swing
• SUP 4: 0.6000 Round number support

A bullish condition in AUDUSD remains intact and last week’s gains reinforce the current bullish set-up. Sights are on key resistance at 0.6410/14 - the 100-dma and the 38.2% retracement of the Sep 30 ‘24 - Feb 3 bear leg respectively. A clear break of both levels would set the scene for the next leg higher for the pair, making 0.6429 the next target, the Dec 12 ‘24 high. The 50-day EMA undercuts as support, crossing at 0.6314.

• Treasury futures reversed early session weakness and look to finish near late session highs. Safe haven buying amid ongoing concerns over the Trump administration's trade policy and stocks reversing early support to new multi-week lows were cited by trading desks.
• Tsy futures remain bid (TYH5 +4.5 at 109-26.5) after the latest $69B 2Y note auction (91282CMP3) stops out: 4.169% high yield vs. 4.179% WI; 2.56x bid-to-cover vs. 2.66x prior.
• Currently, Mar'25 10Y futures are through initial technical resistance of 109-24 to 109-27.5 (+5.5), nearing a Bull Trigger level at 110-00. Next resistance at 110-14 (High Dec 14). Curves off lows: 2s10 +0.143 at 23.047%, 5s30s +1.987 at 42.416%.
• Projected rate cuts through mid-2025 steady to firmer vs. this morning levels (*) as follows: Mar'25 steady at -0.5bp, May'25 steady at -7.1bp, Jun'25 at -18.0bp (-17.3bp), Jul'25 at -25.6bp (-23.6bp).
• Cross asset update: Crude mildly higher (WTI +.22 at 70.62; Gold climbing 13.55 at 2949.60; Bbg US$ index off lows at 1286.80 (+.57) as late President Trump comments on Canada & Mexico tariffs proceeding.

SOFR & Treasury option flow remained mixed Monday, early SOFR call structure buyers fading this morning's weaker underlying futures continued into the second half reversal. Projected rate cuts through mid-2025 steady to firmer vs. this morning levels (*) as follows: Mar'25 steady at -0.5bp, May'25 steady at -7.1bp, Jun'25 at -18.0bp (-17.3bp), Jul'25 at -25.6bp (-23.6bp).

• SOFR Options:
  • Block, 1,250 SFRM5 95.87/96.00 4x5 call spds, 4.0 net, vs. 95.865/0.26%
  • Block +5,000 2QJ5 96.25/96.62/97.00 call flys, 6.0 vs. 96.13/0.10%
  • over 7,800 SFRH5 96.06 calls, 0.75 last 
  • -12,000 SFRJ5 95.62/95.68/95.75 put flys, 1.25
  • +10,000 SFRU5 96.25/96.37 call spds, 2.0 ref 95.985
  • +4,000 SFRM5 96.18/96.31/96.43/96.56 call condors, 0.5 vs. 95.885
  • +4,000 0QJ5 96.31/96.62 call spds, 6.0 ref 96.135
• Treasury Options:
  • Block, +15,000 wk1 TY 110.75/111.25 call spds 5 ref 109-25.5, exp Mar 7)
  • 10,000 TYJ5 106/107 put spds, 1 ref 109-18.5 to -19
  • +4,200 TYM5 111/113.5 call spds 2 to 3 over TYU5 104.5/107 put spds
  • 2,500 FVJ5 106.25 puts, 13.5 ref 106-28
  • 1,200 wk4 TY 109.5/110.25/110.5 broken put trees ref 109-16.5 (expire Fri)