EURGBP TECHS: Trend Needle Points South

In a speech Tuesday (link) largely addressed to developments in payments, cash and digital money/stablecoins, BOC Gov Macklem largely repeats many of the key monetary policy messaging he and Governing Council made last week alongside its rate hold. 

• With words taken nearly exactly from the December meeting statements, he says "the economy is proving resilient overall. Inflationary pressures continue to be contained despite added costs related to the reconfiguration of trade. Total CPI inflation has been close to the 2% target for more than a year now, and we expect it to remain near the target. In the current situation, Governing Council sees the policy rate at about the right level to keep inflation close to 2% while helping the economy through this period of structural adjustment. Uncertainty is of course still very high. If the outlook changes, we are prepared to respond."
• BOC rate pricing was little changed on the session, including post-speech Q&A (which had little in addition to the above), with about 18bp of hikes priced through next October.
• Separately on a more dovish note, MNI's Policy team reported: "Canada's central bank has a case to lower interest rates next year if the economy remains weak, while the hike some investors are betting on won't happen, former deputy Paul Beaudry said Tuesday, speaking during a panel talk for the Bennett Jones law firm."

• 5,000 SFRH6 96.37/96.43/96.50/96.68 broken call condors, 1.0 net / belly over at 1302:16ET

• +67,185 USF6 108 puts at cab-7, new position with open interest of 4,024 coming into the session. The Mar'26 options expire in 10 days - the Friday after Christmas.
• Precedent: On Wednesday, December 3: paper bought 84,361 wk2 30Y 106 puts trade on screen at cab-7
  • The 10 handle out-of-the-money option expired last Friday, December 12 - after the FOMC's widely anticipated third consecutive 25bp rate cut last Wednesday.
  • Most likely a hedge vs some short term balance sheet risk that corresponded to a rise in 30Y yield to (rough) appr 5.48% from 4.73% yield at the time of trade.