STIR FUTURES: BLOCK: Red Dec'26 SOFR Buy

Bonds and oil rally after a U.S. official tells RTRS that U.S President Trump is expected to sign an executive order on Tuesday restoring "maximum pressure" on Iran, with the Secretary of State set to “modify or rescind existing sanctions waivers and cooperate with treasury to implement a campaign "aimed at driving Iran’s oil exports to zero.”

• The negative correlation between bonds and oil had been at play before crude turned, helping core global FI markets away from session lows, before bond markets reacted to the headlines in more of a risk-off fashion.
• U.S. yields now little changed to 1bp higher on the day, light steepening on the curve.
• Meanwhile, German yields are 2-3bp higher and UK yields are 2-4bp higher.
• Trump headline risk remains elevated in the early weeks of his Presidency and is set to remain a mainstay during his second term.

• RES 4: 6178.75 High Dec 6 and key resistance    
• RES 3: 6162.25 High Jan 24 
• RES 2: 6147.75 High Jan 31 
• RES 1: 6069.00 High Feb 3                
• PRICE: 6030.25 @ 14:44 GMT Feb 4 
• SUP 1: 5935.50 Low Feb 3           
• SUP 2: 5892.37 76.4% retracement of the Aug 5 - Dec 6 bull leg
• SUP 3: 5842.50 Low Jan 14 
• SUP 4: 5809.00 Low Jan 13 and a key resistance 

The S&P E-Minis contract started the week on a bearish note. The gap lower Monday and a breach of support at 5948.00, the Jan 27 low, strengthens a bearish threat and cancels - for now - a recent bullish theme. An extension down would open 5892.37, a Fibonacci retracement point. Initial resistance is at 6069.00, today’s intraday high. Gains are considered corrective, however, a stronger rally would expose key resistance at 6178.75, the Dec 6 high.

Structural positioning is largely flat across European bond futures as of Monday's close, per MNI Europe Pi.

• Each of the German contracts is in structurally flat positioning, as are Gilt; OAT are short, with BTPs long.
• This is a subtle shift in the longer direction - Bobl and Buxl had been short as of our Jan 28 update, while OAT has shifted from "very short", and BTP has moved from "flat".
• The week to Monday saw longs set across all contracts overall, with the exception of short cover in Schatz. Monday's trade was similar, with short cover in Schatz and Bobl, and longs set across the other contracts.