EM CEEMEA CREDIT: YapiKredit: Final Guidance out $ AT1

• RES 4: 0.6700 76.4% retracement of the Sep 30 ‘24 - Apr 9 bear leg
• RES 3: 0.6688 High Nov 7 ‘24
• RES 2: 0.6677 0.764 proj of the Jun 23 - Jul 11 - 17 price swing  
• RES 1: 0.6625 High Jul 24
• PRICE: 0.6528 @ 13:48 BST Jul 28
• SUP 1: 0.6516 Intraday low  
• SUP 2: 0.6505/6455 50-day EMA / Low Jul 17  
• SUP 3: 0.6373 Low Jun 23 and a bear trigger  
• SUP 4: 0.6357 Low May 12

Last week’s fresh trend highs in AUDUSD reinforce bullish conditions and the latest pullback is considered corrective. Gains have resulted in a print above key short-term resistance at 0.6595, the Jul 11 high and bull trigger. This marks a resumption of the uptrend and sights are on 0.6688, the Nov 7’ 24 high. Support to watch is at the 50-day EMA, at 0.6505. A clear break of this EMA would highlight a stronger reversal.

A Chinese trade delegation, led by Vice Premier He Lifeng, and a US delegation, led by Treasury Secretary Scott Bessent, have arrived at the venue in Stockholm, Sweden, for the third round of trade talks. 

• MNI noted in the Political Risk Week Ahead that there is increasing speculation that another 90-day extension will be agreed upon to avoid the imposition of 100%+ tariffs. SCMP reported overnight that another 90-day pause is expected, during which time “the two nations will commit to not impose additional tariffs on each other, nor escalate the trade war by other means.”
• During a press conference with European Commission President Ursula von der Leyen yesterday, Trump said the US is “very close to a deal with China." Trump added: “We really sort of made a deal with China, but we’ll see how that goes.”
• A breakthrough in talks could facilitate a meeting between Trump and Chinese President Xi Jinping in the Autumn. Trump said on Friday he would likely visit China at Xi’s invitation in the “not too distant future.”
• Discussions are likely to focus on thorny issues related to tech and critical mineral export controls, and Chinese purchases of sanctioned Russian and Iranian oil. Beijing is expected to press the US to reduce tariffs related to Fentanyl.
• FT reported earlier: “The US has frozen restrictions on technology exports to China to avoid hurting trade talks with Beijing and help [Trump] secure a meeting with [Xi]..." 

US SOFR/TREASURY OPTION SUMMARY

SOFR & Treasury options were rather paired on lighter volumes overnight - two way positioning ahead of Wednesday's FOMC annc. Underlying futures weaker after paring losses in early London trade, curves steeper with 2s10s +1.392 at 47.641, 5s30s +.909 at 97.968. Projected rate cut pricing running steady to mildly cooler vs. late Friday (*) levels: Jul'25 at -0.05bp, Sep'25 at -16.7bp (-16.7bp), Oct'25 at -27.6bp (-28.1bp), Dec'25 at -43.6bp (-44.2bp). Year end projection well off early July level of appr -65.0bp

• SOFR Options:
  • 2,000 SFRU6 96.62/97.25 2x1 put spds
  • 2,000 SFRQ5 95.87/96.00/96.12 call flys ref 95.825
  • Block/screen, 4,000 SFRU5 95.81/95.87/95.93 put flys, 0.75 ref 
  • 2,000 SFRH6 96.81/97.06 call spds ref 96.295
  • 3,000 SFRU5 96.75/97.62 strangles ref 96.675
  • 1,000 SFRU5 96.75/97.37 2x1 put spds vs. 97.00/97.62 1x2 call spds
  • 6,000 0QZ5 95.87/96.12/96.37 put flys, 3.0
  • +1,000 SFRQ5 95.875/96.00/96.12 call flys, 1.5 vs. 95.845/0.10%
  • +1,000 SFRU5 95.875/96.00/96.12 call flys, 2.75 vs. 95.855/0.08%
• Treasury Options:
  • 4,000 USU5 115/117/118 broken call flys
  • over 4,600 TYU5 110 puts, 20
  • over 4,900 TYU5 111 calls, 37
  • over 4,600 TYV5 109.5 puts, 31 ref  111-01
  • 3,000 TYU5 106.25 puts, 1
  • +5,000 wk1 TY 111 puts, 22
  • +5,000 wk1 TY 111 calls, 26
  • +4,850 TUU5 103.625/104.25 call spds, 7.5-8