GOLD: Westpac Expect Gold To Move Higher Over Medium-Term
Westpac write “gold continues to oscillate within the range in place since early June. Prices briefly spiked above $3400/oz on July 22 as investor fears boiled over the impending Aug 1 tariff deadline, however, the announcement of trade deals with the EU and Japan, and Trump winding down threats around firing Powell saw prices revert back inside the 2-month range”.
- From here, they flag that “a sustained move out of this range over the shorter-term will require a more potent catalyst i.e. further Russia/US escalation or removal of Powell, however as secular downside risks to the US economy continue to materialise, we anticipate an eventual break higher above $3450”.
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US TSY FUTURES: BLOCK: Sep'25 2Y/10Y Ultra
Likely curve steepener crossed recently at 0720:30ET:
- +6,658 TUU5 103-17.5, through 103-17.38 post time offer vs.
- -2,953 UXYU5 112-01.5, post time offer
PIPELINE: Corporate Bond Roundup: Citigroup, JP Morgan on Tap
US banks issuing after announcing earnings Tuesday, more to follow:
- Date $MM Issuer (Priced *, Launch #)
- 07/16 $Benchmark JP Morgan 11NC10 +140a
- 07/16 $Benchmark Citigroup PerpNC5 7.12%a
- 07/16 $2.2B Kioxia Holdings 5NC2 6.37%a, 8NC3 6.75%a
- $3.7B Priced Tuesday
US TSYS: Early SOFR/Treasury Option Roundup: Shift (Mostly) to Calls Ahead PPI
With few exceptions, SOFR & Treasury options saw better call volumes overnight, couple larger SOFR trades on otherwise limited volumes. Treasury highlight buyer of over 47,000 Sep'25 10Y put spds (block/screen). Underlying futures firmer with focus on June PPI data this morning. Projected rate cut pricing holds steady vs late Tuesday (*) levels: Jul'25 at -0.6bp, Sep'25 at -14.2bp, Oct'25 at -27.1bp, Dec'25 at -43.7bp.
- SOFR Options:
- 1,500 SFRZ5 95.62/95.75/95.87 put flys, ref 96.08
- -19,750 SFRQ5 95.68/95.75 put spds 1.25 ref 95.815
- Block/screen, +20,000 SFRH6 96.37/96.50 call spds vs. 96.00/96.12 put spds, 0.5 net vs. 96.31/0.15%
- 1,000 SFRU5 95.68/95.75/95.872x3x1 broken put flys ref 95.815
- Treasury Options:
- +5,000 TYU5 113/115 1x2 call spds, 2 vs. 110-12.5/0.05%
- -2,500 TUU5 103.25 puts, 5.5
- +15,000 TYU5 115 calls, 3
- +10,000 TYU5 115.5 calls, 3
- +5,000 TYU5 108/109 put spds, 11
- Block/screen over +47,000 TYU5 108.5/109.5 put spds 16 vs. 110-10/0.15%
- 2,500 TUU5 103.12/103.37/103.5/103.62 broken put condors, 0.5 net ref 103-17.12
- -3,000 TYQ5 109.75/110.75 call over risk reversals, 0.0
- 4,300 TYV5 111/112 call spds ref 110-08
- 4,250 TYQ5 110.5 calls ref 110-12
