AUDUSD TECHS: Approaching Key Resistance

SOFR & Treasury option flow looks mixed by Tuesday's close, chunky vol buying in Tsy 10s ahead of Wednesday's FOMC policy annc. April Tsy options expire Friday. Underlying futures firmer after the bell, off late highs, curves flatter/off earlier highs. Projected rate cuts through mid-2025 steady to softer vs. morning levels (*) as follows: Mar'25 steady at -.2bp, May'25 at -5.4bp ( -6bp), Jun'25 at -18.2bp (-19.7bp), Jul'25 at -26.7bp (-28.7bp).

• SOFR Options:
  • +5,000 SFRJ5 95.87/96.00/96.25 broken call flys 1.0 ref 95.87
  • -5,000 SFRM5 95.68/95.81 put spds, 5.75 ref 95.87
  • -4,000 0QM5 97.00/97.50 call spds w/ 0QU5 96.50/97.00 call spd strip, 18.0 total
  • -5,000 0QJ5/2QJ5 9625 put spds, 1.5 Green Apr over
  • -3,000 SFRH6 95.75/96.00/96.50/96.75 Iron Condor 16.25 ref 96.325
  • +5,000 SFRM5 96.18/96.31/96.43/95.62 call condors, 0.5 ref 95.875
  • +10,000 SFRJ5 95.68 puts, 0.5 ref 95.855/0.04%
  • -3,000 SFRU5 96.00 puts, 15.5 vs. 96.08/0.42%
  • 2,000 96.12/96.50/96.87 call flys
  • 4,000 SFRU5 96.43 calls ref 96.095
  • 1,730 SFRU5 SFRU5 95.81/95.93 put spds vs. 96.43/96.75 call spds ref 96.095
  • 4,000 0QH6 97.00/97.50/98.00/98.50 call condors ref 96.385
  • 3,000 SFRM5 95.62/95.75/95.81/95.87 broken put condors
• Treasury Options: (April options expire Friday)
  • 4,000 TYJ5/TYK5 112 call spds, 23 ref 110-20
  • 5,000 TYJ5 109 puts ref 110-21.5
  • Block, +15,000 TYM5 107.5/113.5 strangles, 35 vs. 110-18.5/0.05%
  • +9,000 TYM5 108/113 strangles, 45 vs. 110-19/0.05%
  • +5,000 TYK5 112 calls, 25 vs. 110-18/0.28%
  • 10,000 TYJ5 109 puts ref 110-19
  • 7,000 TYK5 109/111 3x2 put spds ref 110-18 to -18.5
  • over 5,100 TYJ5 111 calls, 11 last (2k vs Wed/wkly 10Y 111 calls)
  • over 2,000 TYJ5 111.25/Wed/wkly 111.25 call spds call spd
  • 1,000 Wed/wkly 10Y 111/111.25/111.5 call flys ref 110-20.5

• Stocks remain weaker late Tuesday - off lows after reversing Monday's bounce of six month lows. Currently, the DJIA trades down down 256.49 points (-0.61%) at 41586.23, S&P E-Minis down 59.75 points (-1.04%) at 5672.75, Nasdaq down 260 points (-1.5%) at 17548.92.
• Communication Services and Consumer Discretionary sectors continued to underperform in late trade, interactive media and entertainment stocks weighing on the former: Meta Platforms -3.65%, Alphabet -2.68%, Live Nation Entertainment -1.85% and Netflix -1.75%
• The Discretional sector weighed on by Tesla -5.14% and cruise lines: Royal Caribbean Cruises -5.72%, Norwegian Cruise Line Holdings -4.67% and Carnival -3.66%.
• On the positive side, Health Care and Energy sectors outperformed in late trade, services buoyed the former: Humana Inc +2.24%, CVS Health Corp +1.83%, Becton Dickinson & Co +1.67%, Elevance Health +1.67%. Meanwhile, oil and gas stocks supported the Energy sector: Coterra Energy +2.02%, EQT +1.99%, Hess +0.97% and Chevron +0.79%.

• Crude has reversed earlier gains as greater optimism towards a ceasefire in Ukraine offset concerns for wider escalation in the Middle East.
• WTI Apr 25 is down by 1.0% at $66.9/bbl.
• The White House and Kremlin have released readouts of the recently concluded call between President Putin and President Trump, with both noting that Moscow agreed to the implementation of a 30-day energy and infrastructure ceasefire.
• A bearish condition in WTI futures remains intact, with initial support at $65.22, the Mar 5 low, followed by $63.61, the Oct 10 ‘24 low.
• Meanwhile, spot gold has risen to a fresh all-time high today, with the yellow metal currently up by 1.2% at $3,036/oz.
• The move comes amid increased geopolitical tensions in the middle east as Israel launched airstrikes in Gaza today after Hamas failed to release the remaining hostages.
• A clear uptrend in gold remains intact, and this week’s resumption of the bull cycle reinforces current conditions. Sights are on $3,056.84 next, a Fibonacci projection.
• Copper has also extended gains, with price piercing the $500 level for the first time since May last year. Copper futures are currently up by 1.0% at $501/lb.
• A bull cycle in copper futures remains in play, with next resistance at $503.59, a Fibonacci projection, followed by $514.40, the 2.00 projection of the Jan 2 - 17 - Feb 3 price swing.