US TSYS: Tsy Yields Up With Surge in Crude, Sanctions on Russia Oil Giants
- Treasuries look to finish weaker-near late session lows, coinciding with a surge in crude oil (WTI +3.25 at 61.75), after the US sanctioned Russia oil giants Rosneft and Lukoil overnight.
- China and India are most affected by the new measures, with importers suspending purchases in the near-term. Late headlines annc Pres Trump expects to meet with Pres Xinext Thursday
- The Russian Foreign Ministry have issued its first comments following the announcement of US sanctions on oil giants Rosneft and Lukoil. Ministry spox says the sanctions are "counterproductive from the perspective of finding peace in Ukraine...If the US follows the example of previous US administrations, then it will be a failure".
- Currently, TYZ5 contract trades -11 at 113-14.5 vs. -13.5 low, 10Y yield at 3.9951% +.0458. Firm support lies at 113-06, the 20-day EMA. Moving average studies remain in a bull-mode position and this set-up highlights a dominant uptrend. Sights are on 114-10, the Apr 7 high (cont) and the next key resistance.
- Look ahead to Friday's data: The median unrounded headline CPI estimate ticks up from 0.40 to 0.41% M/M and core ticks up from 0.30 to 0.32% but the broad story is unsurprisingly still the same.
- Equity earnings after the close include: Ford Motor Co, Newmont, Norfolk Southern, Western Union, Deckers Outdoor, Intel and Baker Hughes.
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US TSYS: Late SOFR/Treasury Option Roundup: Low Delta Call Focus
Mixed SOFR/Treasury options segued to better low delta calls and call spreads Tuesday, buyer TYZ5 114 calls adding to +116k on Monday. Underlying futures firmer, curves flatter, projected rate cut pricing near early morning levels (*): Oct'25 at -22.7bp (-22.9bp), Dec'25 at -43.3bp (-42.9bp), Jan'26 at -54.5bp (-53.9bp), Mar'26 at -66.5bp (-66.1bp).
- SOFR Options:
- -6,000 0QX5 95.87 puts, .25
- +20,000 SFRZ5 96.37/96.50/96.62 call flys, 2.5-2.75 ref 96.33
- +30,000 SFRH6 97.25 calls 3.0 vs. 96.55/0.10%
- -20,000 SFRH6 96.75/97.00 call spds 4.5 vs. 96.545
- +5,000 SFRZ5 97.00 calls, 0.75 ref 96.335/0.05%
- +5,000 SFRF6 96.25/96.37 put spds .25 over 0QF6 96.37/96.62 put spds
- 2,000 SFRZ5 96.31/96.50/96.68 call trees ref 96.325
- 5,000 SFRZ5 96.00 puts, 1.0 ref 96.325
- 4,500 SFRZ5 96.50 calls, 3.0 ref 96.32
- 2,000 SFRZ5 96.25 puts, 6.0 last
- 1,000 SFRZ5 95.93/96.06/96.18 put flys ref 96.325
- +2,000 SFRZ5 96.25 puts, 6.0
- Treasury Options:
- 2,000 TUV5 104.37 puts, 9 - total volume over 21,500
- over 3,800 TUX5 104.25/104.37/104.5/104.62 put condors
- 2,000 USZ5 117/119 call spds vs. 112 puts ref 116-22
- 5,000 TYV5 112.75/113.25 2x1 put spds, 22.0 re
- -5,000 TYX5 111.5/114 strangles, 27
- 6,550 USV5/USX5 118/121 call spd spd
- +50,000 TYZ5 114 calls, 31 vs. 112-25/0.29%
- 5,000 TYV5 112.75/113.5 put spds ref 112-25
- 2,200 FVX5 109.25 puts, 22 ref 109-12.75
- 1,300 TYX5 112 put vs. 113/114 call spds ref 112-25.5
- 4,800 Wednesday wkly 5Y 109.25 puts, 1 exp tomorrow
- 17,000 TYZ5 113/114.5 1x2 call spds vs. 111.5/112.5 2x1 put spds (2x1 iron condor, pays 2)
- 2,400 TYV5 112/112.25 put spds ref 112-25
- 2,000 TYX5 113 calls vs. TYZ5 113/114 call spds, 14 net/Dec bought over
- 3,000 TYV 113/113.5 call spds 7 vs. 112-29.5/0.08%
- 1,000 TUV5 104.25 puts, 2.5 ref 104-08.5
- +1,300 TYX5 111 puts, 8
EURGBP TECHS: Approaching Resistance
- RES 4: 0.8835 High May 3 2023
- RES 3: 0.8800 Round number resistance
- RES 2: 0.8769 High Jul 28 and the bull trigger
- RES 1: 0.8746 High Sep
- PRICE: 0.8739 @ 19:51 BST Sep 23
- SUP 1: 0.8650/8597 50-day EMA / Low Aug 14 and the bear trigger
- SUP 2: 0.8562 50.0% retracement May 29 - Jul 28 upleg
- SUP 3: 0.8540 Low Jun 30
- SUP 4: 0.8514 61.8% retracement May 29 - Jul 28 upleg
Recent weakness in EURGBP has been corrective and last week’s recovery confirmed the end of the latest corrective phase. Support to watch lies at 0.8597, the Aug 14 low. Clearance of this level would cancel a bull theme and reinstate a recent bearish threat. For bulls, the resumption of gains opens the key resistance and the bull trigger is at 0.8769, the Jul 28 high. First support is 0.8650, the 50-day EMA.
GBPUSD TECHS: Trendline Support Remains Intact For Now
- RES 4: 1.3893 1.236 proj of the Aug 1 - 14 - Sep 3 price swing
- RES 3: 1.3789 High Jul 1 and key resistance
- RES 2: 1.3753 High Jul 2
- RES 1: 1.3661/3726 High Sep 18 / 17
- PRICE: 1.3520 @ 20:48 BST Sep 23
- SUP 1: 1.3458 Trendline support drawn from the Aug 1 low
- SUP 2: 1.3453 Low Sep 22
- SUP 3: 1.3333 Low Sep 3 and a key support
- SUP 4: 1.3282 Low Aug 6
A bullish theme in GBPUSD remains intact and the latest move down from the Sep 17 high is considered corrective - for now. However, the pair has traded through the 50-day EMA and this signals scope for a deeper retracement. The next support to watch lies at 1.3449, a trendline support drawn from the Aug 1 low. For bulls, a resumption of gains would refocus attention on key short-term resistance at 1.3726, the Sep 17 high.
