EUR: Under small pressure

Late morning rebuttal of Russia Pres Putin comment of "positive shifts" in Ukraine talks by Ukraine foreign minister Dmytro Kuleba on Bbg reversed the pre-NY open risk-on moves.

• Kuleba said there was "zero progress" in peace talks, and did not address Ukraine Pres Zelensky comment "Ukraine has reached a strategic turning point in war". Meanwhile , Kuleba asked for loopholes in sanctions against Russia to be closed along with ports currently open to Russian vessels. Kuleba reiterated Ukraine's "neutrality must come with security guarantees" while also asking for military supply including military jets offered by Poland earlier in the week.
  
  
• Tsy bonds back near early overnight high: USM2 +26 at 155-17 (30YY 2.3418% -0.0252) before settling back inside the session rtange. Yield curves bull flattened as 5s30s dipped below 40.0 briefly, marked 40.925 -3.222 after the close.
• Cross asset: SPX eminis -1.21% at 4196.75 (-51.5); West Texas Crude (WTI) +3.10% at 109.19 (+2.92); Gold -0.63% at 1984.47 (-12.52).
• Markets remain on edge -- wary of headline risk over the weekend. Look ahead: slow start to next week, no significant data Monday, Feb PPI on Tuesday MoM (1.0% prior, 0.9% est); YoY (9.7%, 10.0%).

• RES 4: 1.3024 38.2% retracement of the Mar ‘20 - Jan ‘21 bear cycle
• RES 3: 1.2964 High Dec 20 and a key resistance
• RES 2: 1.2924 High Dec 22
• RES 1: 1.2901 High Mar 8
• PRICE: 1.2725 @ 17:31 GMT Mar 11
• SUP 1: 1.2713 50-day EMA
• SUP 2: 1.2587 Low Mar 3
• SUP 3: 1.2552 76.4% retracement of the Jan 19 - Feb 24 rally
• SUP 4: 1.2499 Low Jan 21

USDCAD is lower following Friday’s strong employment report. The pair has traded through the 20-day EMA highlighting an extension of the pullback from Tuesday’s 1.2901 high. The focus is on the 50-day EMA, at 1.2713, and a key support. A clear break of this average would signal scope for a deeper retracement of the recent Mar 3 - 8 rally. On the upside, a break of 1.2901 is required to reinstate the recent bullish focus.

Friday FI derivatives trade saw carry-over interest in buying upside calls, and modest positioning in long puts. Theme gaining momentum -- despite underlying futures pricing in six to seven 25bp hikes by year end -- is that increased market uncertainty due to Russia's war in Ukraine is likely to forestall more hikes down the road (after the Fed hikes next week).

• Late examples in Treasury options: paper bought 25,000 TYJ 127.75 calls at 11 after the bell (ref: 125-31), followed by a Block buy of 32,000 TYJ 128 calls, at 10 ref 125-31.5 after paper bought 10,000 earlier in session at 9.
• Eurodollar option highlights included Block buy of +15,000 short Jul 98.25 calls, 8.0 vs. 97.58/0.20%, and +10,100 short May 97.62 combos.
  
  
• Large vol buyer picked up +20,000 (block) Dec 97.50/98.50 strangles, 46.5. In puts, paper +10,000 short Jun 97.50/97.75/98.00 put flys vs. Dec 97.12 puts.