IRAN: US Could Join E3 In Non-Compliance Resolution @ 9 June IAEA Meeting
Earlier this morning, Laurence Norman at WSJ posted on X: "I am hearing the US will back/join an E3 resolution at [the International Atomic Energy Agency Board of Governors' meeting] next week [9 June] on Iran's safeguards non-cooperation. I am told it will include the key specific non-compliance claim. US backing makes a resolution very likely to pass." The latest IAEA report claims that Iran now has a stockpile of nearly 400kg of uranium enriched to 60%, near to weapons grade and a 50% increase on three months ago. The 2015 nuclear deal expires in October, and if no new agreement is reached, 'snapback' sanctions will come into force from the E3 (France, Germany, UK).
- There remains significant uncertainty as to what any deal might look like, with conflicting reports common.
- Iranian Supreme Leader Ayatollah Ali Khamenei has criticised the US' nuclear deal initial proposal, but did not call for talks to stop. As WSJ notes, Khamenei's comments, "...colored in the red line expressed over recent days — one that says Tehran refuses to give up enriching uranium in any possible deal with the U.S. That demand has been repeatedly made by American officials,[...]. But what Khamenei did not say in his speech matters as well. He didn’t reject the talks, which Iran views as crucial for its economy to lift some the crushing economic sanctions it faces."
- Axios reports that Iran may consider allowing a regional uranium consortium as part of a deal, as long as it is located in Iran, while NYT reports the US could allow enrichment at low levels while agreeing on a plan to stop enrichment to weapons-grade levels.
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STIR: Repo Reference Rates
- Secured Overnight Financing Rate (SOFR): 4.36% (-0.03), volume: $2.694T
- Broad General Collateral Rate (BGCR): 4.33% (-0.02), volume: $1.073T
- Tri-Party General Collateral Rate (TCR): 4.33% (-0.02), volume: $1.036T
- (rate, volume levels reflect prior session)
US TSY FUTURES: Bonds Paring Losses
- Treasury futures are inching higher, 30Y following shorts to intermediates as curves temper steepening move (2s10s +0.740 at 48.972).
- No particular headline driver, volumes remain light (TYM5 220k) with UK and much of Asia on spring holidays, NY desks gradually populating.
- Tsy Jun'25 10Y contract breaking higher after trading in narrow 4-tick range for the past nine hours, TYM5 +8.5 at 111-13.5, revisiting early overnight high. Initial technical resistance above at 112-01.5 (High Apr 2); price needs to trade above key short-term resistance at 112-20+, the May 1 high, to reinstate a bullish theme.
US TSYS: Early SOFR/Treasury Option Roundup: Focus on Midweek FOMC
Option desks report mixed SOFR & Treasury options overnight, lighter volumes with multiple spring holiday closures in Asia and UK. Focus on Wednesday's FOMC policy annc, no rate change expected. Underlying futures mixed, curves twist steeper with the short end outperforming weaker Bonds (2s10s +2.465 at 50.697, 5s30s +3.158 at 90.038). Projected rate cut pricing largely steady to late Friday levels (*) as follows: May'25 at -0.5bp (-0.8bp), Jun'25 at -8.4bp (-8.4bp), Jul'25 at -25.5bp (-25.7bp), Sep'25 -46.9bp (-45.6bp).
- SOFR Options:
- +4,000 SFRZ5 95.93 puts, 9.5 ref 96.475
- 2,000 SFRK5 95.93/96.00 call spds ref 95.80
- over 3,500 SFRK5 96.06 calls, 0.5 ref 95.81
- Treasury Options:
- over 7,500 TYM5 112 calls, 25 last
- 1,600 FVM5 107/107.5 put spds ref 108-14.25
- 2,000 TYM5 110.5/111.25 put spds, 22 ref 111-06.5
- over 3,200 TYM5 111.25 calls, 46 ref 111-08
- 1,000 TYM5 111/112/113/114 call condors
- 1,600 FVM5 107.25 puts ref 108-15.25
