US TSY OPTIONS: BLOCK: April'25 TY Broken Call Fly Buyer

• +9,600 FFQ5 95.86, post time offer at 1211:45ET, DV01 $400,000. The August contract trades 95.86 last (-0.010)

Prime Minister Francois Bayrou is scheduled to deliver his discours de politique générale (general policy speech) in the National Assembly at 1500CET on Tuesday 14 January. This will mark the first time that he offers significant detail on his plans for gov't, and is being watched closely for signs of whether he will roll back some of the pension reforms pushed through by President Emmanuel Macron in 2023. 

• Bayrou is in as vulnerable a position as his short-tenured predecessor Michel Barnier. There has been speculation in recent days that Bayrou could temporarily postpone the gradual raising of the retirement age to 64 in an effort to gain the support of the centre-left Socialist Party (PS) which could be critical in avoiding a successful censure motion. PS deputy Philippe Brun said on 10 Jan that “If François Bayrou refuses to suspend the pension reform, he won’t survive the next three weeks,”
• However, in appeasing the centre-left Bayrou risks alienating the centre-right. Former presidential candidate for the conservative Les Republicains Valerie Pecresse warned on 13 Jan that should Bayrou roll back pension reforms "In these conditions especially, the right can no longer participate in this government,"
• A vote on a confidence motion is likely on Thursday 16 Jan, whether called by Bayrou or the far-left La France Insoumise. Depending on the content and reception of Bayrou's speech the gov't could face an early ouster even before it can present a 2025 budget. 

• Stocks are trading mixed early Monday, off early session lows with the DJIA outperforming ahead midday. Narrow ranges amid two-way trade with focus on this week's PPI and CPI inflation measures on Tuesday and Wednesday respectively, as well the next corporate earning cycle that kicks off this week.
• Currently, the DJIA trades up 125.13 points (0.3%) at 42067.97, S&P E-Minis down 35.75 points (-0.61%) at 5830.5, Nasdaq down 259.8 points (-1.4%) at 18900.8.
• Utility and Information Technology sectors underperformed early Monday, independent energy and electricity providers weighed on the former: Edison International down nearly 12% amid investigations into whether electrical equipment operated by SoCal Edison sparked a blaze in Hurst. Elsewhere, Constellation Energy declined 7.76% despite several agency upgrades,  Vistra -4.23 and PG&E -4.08%.
• IT sector shares remained under pressure as the Biden administration looked to squelch high end semiconductor export to China: Super Micro Computer -6.67%, Micron -4.69%, Palantir -3.91, Nvidia -3.13%.
• On the positive sidfe, Energy and Materials outperformed in the first half, support for the latter tied to further gains in crude (WTI +2.18 at 78.75): Valero Energy +6.56%, Marathon Petroleum +5.87%, APA Corp +4.27%. Materials led by CF Industries +6.85%, Mosaic +6.12%, Steel Dynamics +5.16% while Corteva gained 4.40%.
• Reminder, the next round of quarterly earnings kicks off this week with Blackrock, Bank of NY Melon, Wells Fargo, JP Morgan, Goldman Sachs, Citigroup, US Bancorp, M&T Bank and PNC all reporting between January 15-16.