AUSSIE 3-YEAR TECHS: (Z5) Trading Above Its Recent Lows

SOFR and Treasury options traded a little more evenly between calls & puts Tuesday after better SOFR call interest in the first half. Underlying futures trading near late session highs helped projected rate cut pricing gain some traction vs. early morning (*) levels: Sep'25 at -21.7bp (-20.9bp), Oct'25 at -35.1bp (-34.1bp), Dec'25 at -54.4bp (-53.5bp), Jan'26 at -65.6bp (-64.1bp).

• SOFR Options:
  • +10,000 SFRU5 95.81 puts, 3.0 vs. 95.9125/0.21%
  • 4,400 0QV5 96.56/96.68 put spd vs. 2QV5 96.50/96.62 put spds
  • +2,000 SFRU5 95.93/96.00/96.06/96.12 call condors, 0.75
  • +2,000 SFRU5 95.75/95.81/95.87 put flys, .37 ref 95.90
  • +2,000 SFRU5 96.12/96.25 call spds. .87 ref 95.897
  • +4,000 SFRU5 96.00/96.12/96.18 broken call flys, 1.0
  • 6,600 SFRX5 96.12/96.25/96.50 call trees ref 96.205
  • 2,000 2QZ5 96.12/96.31/96.56 2x3x1 put flys
  • 5,000 0QU5 96.50/96.68 put spds ref 96.795
  • 3,500 SFRX5 96.12/96.25/96.50 broken call trees ref 96.195
  • 2,000 SFRZ5 95.87/96.00 put spds
  • 10,000 SFRU5 96.00/96.12 1x2 call spds
  • 17,000 SFRU5 96.00/96.12/96.25 call flys ref 95.895 (adds to some +60k traded through Mon at .75)
  • (Note: Large late Monday buying in Oct'25 96.50 calls, volume 180,197 saw open interest climb +95,227 to 226,924)
• Treasury Options: (reminder Sep options expire Friday)
  • 12,300 wk5 FV 107.5/108 2x1 put spds 1 vs. 108-29/0.05%
  • -6,000 TYV5/TYZ5 112 call spds 29
  • -5,000 TYV5 110.5/112.5 call over risk reversals, 11 vs. 111-23
  • -7,300 FVV5 108.25/109.5 call over risk reversals, 3 vs. 108-28
  • 2,000 USU5 117/119 call spds ref 114-07
  • +5,000 TYV5 111.5 puts, 45 ref 111-19/0.48%
  • 50,000 TYV5 113 calls, 19 ref 111-20
  • over 10,200 TYU5 112.5 calls, 2 last
  • over 7,800 TYU5 113 calls, 1 last
  • over 9,000 TYV5 111 puts, 31 last ref 111-19
  • 4,700 TYU5 113 calls, 1 ref 111-19
  • 3,900 TUV5 103.75/104.5 strangles ref 104-01.38
  • 1,500 TYU5 111.5/111.75 2x3 call spds ref 111-16.5
  • 1,250 TUV5 103.5 puts ref 104-01.75
  • 1,750 TUV5 103.75 puts ref 104-01.88

• RES 4: 177.08 2.000 proj of the Feb 28 - Mar 18 - Apr 7 price swing 
• RES 3: 175.43 High Jul 11 ‘24 and a key medium-term resistance
• RES 2: 174.86 1.764 proj of the Feb 28 - Mar 18 - Apr 7 price swing
• RES 1: 173.97 High Jul 28 and the bull trigger 
• PRICE: 172.38 @ 16:32 BST Aug 19
• SUP 1: 170.19 50-day EMA
• SUP 2: 169.73/45 Low Jul 31 / 23.6% of the Feb 28 - Jul 28 bull leg
• SUP 3: 168.46 Low Jul 1  
• SUP 4: 167.46 Low Jun 23   

The underlying bull trend in EURJPY is intact and for now the recent move down appears to have been a correction. Key support to watch lies at the 50-day EMA at 170.19. A clear break of the EMA is required to highlight a stronger short-term bearish threat. Moving average studies remain in a bull-mode position highlighting a primary uptrend. A break of the Jul 28 high of 173.97, would resume the bull cycle.  

• Stocks continued to extend session lows late Tuesday as the US$ climbed to one week highs (BBDXY +2.71 at 1207.33). Currently, the DJIA trades down 62.57 points (-0.14%) at 44847.07, S&P E-Minis down 43.75 points (-0.68%) at 6425, Nasdaq down 319.9 points (-1.5%) at 21308.83.
• Information Technology and Communication Services sectors continued to underperform in the second half, the former weighed by Palantir Technologies -9.02%, Oracle Corp -5.30%, Advanced Micro Devices -4.90%, First Solar -4.58% and Super Micro Computer -4.58%.
• The Communication Services sector was weighed by: Trade Desk -4.48%, Warner Bros Discovery -2.66%, Netflix -2.47% and Meta Platforms -1.79%.
• On the positive side, Real Estate, Consumer Staples and Health Care sectors continued to outperform. Investment trust stocks supported the former following this morning jump in (albeit volatile) Housing Starts data: Prologis +4.07%, Federal Realty Investment Trust +2.33%, Kimco Realty +1.97% and Weyerhaeuser +1.73%.
• Supporting Consumer Staples stocks included: Philip Morris Int +1.42%, Procter & Gamble +1.40% and PepsiCo +1.40%. Meanwhile, pharmaceuticals buoyed the Health Care sector in late trade: Molina Healthcare +2.76%, Baxter International +2.29% and Labcorp Holdings +2.18%.